The Connecticut Department of Public Utility Control on Wednesday finalized its decision to deny the rate increase request from Berlin natural gas utility Yankee Gas.
In finalizing its draft decision from June 2, the DPUC denied Yankee’s original requested increase of 8.53 percent and modified request of 7.47 percent.
Instead, the DPUC granted a 0.59 percent increase in Yankee Gas rates that will become effective in late July. The monetary difference between the original requested amount and the granted by DPUC is $78 million.
As a result of the DPUC decision, Yankee Gas’ return on equity will drop to 8.83 percent from 10.1 percent. The national average for utilities’ return on equity is more than 10 percent, and 8.83 percent puts Yankee Gas as one of the lowest in the country.
The DPUC decided Yankee Gas would save on expenses if its parent company Hartford-based Northeast Utilities merges with Boston-based NStar in the third quarter of this year. DPUC added that increased sales forecast, current capital market conditions, decreased payroll and reduction to rate base played a role in the decision.
“The DPUC always strives to find a balance between the financial needs of the Company and the interest of its ratepayers,” DPUC Commissioner Amalia Vazquez Bzdyra said following the decision. “I am pleased, in these times economic times, that Yankee’s ratepayers are spared a material increase in their cost for this essential service.”
The merger between NU and NStar awaits a decision from Massachusetts utility regulators, who are scheduled to hold a hearing on the merger on July 6.
