AARP Connecticut Urges PURA to Reject Connecticut Natural Gas & Southern Connecticut Gas Rate Increase Request

Public Hearing in February Offers Ratepayers Opportunity to Provide Testimony

AARP Connecticut urges the Public Utilities Regulatory Authority (PURA) to deny a combined proposal by the Connecticut Natural Gas Corporation (CNG) and Southern Connecticut Gas Company (SCG) to implement distribution rate increases for Connecticut residential customers. The complete testimony submitted to PURA by AARP Connecticut is below.

Under the proposed rate application, CNG proposes a revenue increase of $19.8 million, or approximately 4.3% of total revenues. SCG proposes a revenue increase of $40.6 million, or approximately 9.0% of total revenues. Depending upon where a customer is located, the proposed increase would add between $20.08 and $40.15 on a quarterly basis to the typical residential gas bill.

PURA will hold a public comment hearing to receive ratepayer feedback on CNG’s and SCG’s application to amend the rate schedules. AARP Connecticut encourages potentially impacted ratepayers to voice their position during a public hearing held virtually via Zoom on Friday, Feb. 16 at noon.

Residents can also submit a written public comment to PURA by writing to PURA at 10 Franklin Square, New Britain, CT 06051 or sending an email to executivesecretary@ct.gov.

“The impact of these rate increases will be one more financial worry for Connecticut residents 50-plus and their families – many of whom are on moderate, low, or fixed incomes – already hit hard by inflation and other economic pressures,” said John Erlingheuser, AARP Connecticut Senior Associate State Director.

The testimony AARP Connecticut submitted to PURA follows:

Application of Connecticut Natural Gas Corporation and the Southern Connecticut Gas Company to Amend their Rate Schedules

(Docket No. 23-11-02)

Comments of AARP Connecticut – November 29, 2023

AARP hereby submits its concerns with the Connecticut Natural Gas Corporation (“CNG”) and The Southern Connecticut Gas Company (“SCG”) combined rate case on behalf of its members in Connecticut. AARP represents residential customers age 50+ and their families. Many of our members are on fixed incomes or are low income and struggle to make ends meet in this inflationary environment.

The proposed CNG 9.0% residential heating distribution rate increase, excluding the cost of gas, to take effect on November 1, 2024, will be burdensome. This will be in addition to increasing residential heating customers’ fixed charges 18.1% from existing rates.

The proposed SCG 18.9% residential heating distribution rate, excluding the cost of gas, plus increasing residential heating customers’ fixed charges 35.9% from existing rates will also be burdensome.

We urge residential PURA to consider customer impacts foremost when evaluating the requests of CNG and SCG.

Our specific concerns are as follows:

The 10.2% return requested is excessive.
CNG and SCG both requested return on equity of 10.2%, which is excessive given Public Utility Regulatory Authority (“PURA”)’s ratemaking policies which partially mitigate financial risks for both utilities. The requested extension of revenue decoupling mechanisms reduces both companies’ revenue volatility, with a lag. Both companies utilize their respective Distribution Integrity Maintenance Plans and System Expansion Reconciliation Mechanisms to begin to recover certain capital investments, with PURA oversight, between rate proceedings.

The customer charges should not be increased.
Each utility proposes to increase their residential heating monthly fixed customer charges. For CNG, they propose an increase from $18.00 to $21.25 per month; and for SCG from $15.64 to $21.25 per month.

AARP opposes any increase to these monthly fixed charges.

Higher customer charges make controlling natural gas spending more difficult and discourage conservation. These increases would cause ratepayers to see an increase in their gas bills before they even adjust their thermostats.

The rate increase is too high.
The PURA should determine the cost effectiveness and need for the $19.8 million spending request for CNG. The average CNG heating residential customers will experience an annual approximate bill increase of $80.30. Likewise, the average SCG heating residential customers will experience an annual approximate bill increase of $160.60. These rate increases are too high.

Unnecessary or uneconomic spending should be rejected. Spending should be phased in wherever possible.

AARP supports CNG and SCG proposed customer assistance programs.
CNG and SCG have proposed a new Low-Income Discount Rate for customers with income constraints to provide two tiers of discounts for residential heating services.

To fund the discount, both companies have proposed new Energy Assistance Charges. Each company estimated that first year cost to the average customer for this program to be $11.22 for CNG and $12.38 for SCG. These new charges require additional review by PURA to ensure all costs are reasonable and provide additional assistance to CNG and SCG’s customers in the context of the existing customer assistance programs provided by them.

We appreciate this opportunity to comment.

John Erlingheuser
AARP Connecticut Senior Associate State Director, Advocacy