The Connecticut Public Utilities Regulatory Authority on Friday issued a final ruling granting approval of Gov. Dannel P. Malloy’s plan to add 280,000 customers to the natural gas home heating system, with total costs expected to reach $7 billion.
PURA had issued a draft decision on Nov. 6 approving the plan, and made the final ruling Friday after hearing testimony and rebuttals to that initial approval.
Friday’s decision gives natural gas utilities Yankee Gas, Connecticut Natural Gas, and Southern Connecticut Gas more flexibility in making customer conversions more economical, in order to meet Malloy’s plan to make natural gas the home heating fuel of choice in Connecticut. Currently, more than half of the state businesses and residents heat with fuel oil.
The bulk of the $7 billion cost of expanding the natural gas system will be businesses and residents buying new home heating equipment. This $3-4 billion expense will be borne by the individuals making the conversion, although the state has established methods where residents can pay off the equipment purchase through their heating bills and businesses can use public-private financing.
The utility costs of expanding pipelines and hooking up new customers ($2-3 billion) will be folded into ratepayer bills. To cover this cost, PURA put the expense on the new customers.
Instead of a one-time connection costs, new customers added to the system after Jan. 1 will be charged a monthly premium over current rates. Those customers who are already near a gas main will pay a 10 percent premium while those that will require new gas mains to be built in order for them to connect will pay a 30 percent premium. Those premiums on the distribution portion of the customers’ bills will sunset after 10 years.
