Utility regulators on Wednesday approved a scaled-back rate increase for Yankee Gas Services Co., granting the Eversource subsidiary about $82 million in additional annual revenue — less than half the $193 million increase it originally sought.
The Public Utilities Regulatory Authority (PURA) issued a final decision setting Yankee Gas’s annual revenue requirement at $802.2 million for the rate year beginning Nov. 1, 2025, 12% less than the company’s proposed $912.95 million.
The decision translates into a monthly bill hike of roughly $15 for the average residential heating customer, according to PURA — below the $43 to $47 monthly increase the company’s initial proposal would have generated.
PURA approved a return on equity for Yankee Gas of 9.48%, but reduced it by 16 basis points to 9.32% to address what it described as “performance and management issues.”
Yankee Gas had requested an ROE of 10.3% — plus a controversial 50 basis point “regulatory risk premium” — for a total 150 basis point increase from its previously allowed ROE of 9.3%. PURA rejected the risk premium.
The decision also requires Yankee Gas to refund about $40 million of ratepayer money to the utility’s more than 252,000 residential, commercial and industrial customers across 85 Connecticut towns and cities. The refund will offset excess funds collected from ratepayers, which PURA identified through an audit.
The final decision followed what PURA called an “extensive investigatory process” that included more than 1,300 interrogatories submitted by PURA and participants.
The company’s last rate case was completed in 2011. Yankee’s 2017 rate amendment application was resolved through a settlement agreement issued in 2018, making this the utility’s first contested rate proceeding in 14 years.
Three PURA commissioners recused themselves from Wednesday’s decision. Interim Chairman Tom Wiehl recused himself due to his recent involvement in the case while in his former role at the Office of Consumer Counsel. Commissioners Janice Beecher and Holly Cheeseman also recused themselves given their recent start dates at PURA.
The approved revenue increase represents a middle ground between PURA’s draft decision issued in September, which proposed $55 million in additional revenue, and Eversource’s alternative resolution proposal seeking $104 million — a compromise the company had submitted in response to PURA’s draft proposal.
The rate case drew public opposition, with PURA receiving more than 120 written comments during the public comment period. State lawmakers, AARP Connecticut and environmental advocates raised concerns about affordability and the impact on residents already facing high energy costs.
Eversource had argued the rate increase was necessary to recover costs for critical infrastructure investments, including leak-prone pipe replacement programs and flood hardening initiatives mandated by PURA.
The decision comes as Connecticut’s utility regulatory landscape undergoes significant change. Last month, Gov. Ned Lamont appointed four new commissioners to PURA, filling out the five-member commission after a period of tension between state regulators and utilities.