The state’s Public Utilities Regulatory Authority on Wednesday issued a reconsidered final decision in Yankee Gas’s rate case, approving an annual revenue requirement of $806.7 million — a $86.7 million increase over the Eversource Energy subsidiary’s currently authorized revenues.
The state’s Public Utilities Regulatory Authority on Wednesday issued a reconsidered final decision in Yankee Gas’s rate case, approving an annual revenue requirement of $806.7 million — a $86.7 million increase over the Eversource Energy subsidiary’s currently authorized revenues.
The decision, which rescinds and replaces an initial final decision issued Nov. 5, is slightly more favorable to the company. The total revenue requirement is roughly $4.4 million higher than the $802.2 million approved in the original order, driven primarily by the elimination of return-on-equity penalties, adjustments to depreciation and gross earnings tax expenses.
The reconsidered decision was approved by Commissioners David Arconti Jr., Janice A. Beecher and Holly H. Cheeseman.
Yankee Gas, which provides service to more than 252,300 customers in 85 Connecticut municipalities, had requested a $192.9 million increase — a 26.8% jump that would have been the largest sought by a Connecticut gas company in two decades. PURA cut that request by more than half.
The company also filed a last-minute alternative resolution proposal on Oct. 23 offering to settle for a $104.3 million increase, but the approved amount came in below that figure as well.
The most significant change between the two decisions involves the allowed return on equity. Both decisions set a base ROE of 9.48%, up from the previously authorized 9.3%. But the original decision imposed a cumulative 16-basis-point reduction — bringing the effective ROE to 9.32% — to address what it called deficient management in four areas: imprudent record management and procurement practices, capitalizing employee incentive compensation in noncompliance with a prior rate case order, underutilized plant and inadequate documentation of cost-of-removal.
The reconsidered decision eliminates all four penalties, keeping the ROE at the full 9.48%.
PURA did, however, add a new section warning that ROE adjustments could come in future proceedings if Yankee fails to develop operating-company-specific environmental, social and governance goals and metrics, rather than relying on enterprise-wide Eversource initiatives.
Yankee’s last fully adjudicated rate case was in 2011. Its 2017 rate application was resolved through a settlement agreement.
PURA opened the reconsideration proceeding on Dec. 15, after several new commissioners took office.
