The Public Utility Regulatory Authority (PURA) released their draft decision on the natural gas utility’s request to expand their pipelines by 900 miles and convert 280,000 homes and businesses to natural gas. The draft decision would increase rates to businesses who convert to gas by 50%, multi-family dwellings by 50%, homeowners more than 150 feet off a main by 30% and homeowners less than 150 off a gas main by 10%. Existing gas customers will also shoulder a portion of the cost through higher rates.
It is clear in this decision that natural gas rates will be on the rise and that does not take into consideration any future commodity cost increases. The rate increases only include the cost of infrastructure and not the cost of the gas. Homeowners and businesses that want to convert will have to pay higher rates and pay for a new heating system if this plan is approved. The New Haven Register reported on this issue today – http://www.nhregister.com/business/20131107/cema-gas-plan-only-guarantees-higher-costs.
PURA has also built into their decision a shareholder contribution component. If the utilities do not meet certain performance standards, PURA will require them to pay for the cost of the project. This is important because the utilities are totally averse to paying for the expansion of their infrastructure. Any requirement that would lead to the gas company using their own capital will halt their efforts to expand.
A final decision is expected on November 21st. CEMA will continue to work with the Office of Consumer Council and the Attorney General to limit the expansion of natural gas.