Connecticut Attorney General's Office

Press Release

Attorney General Asks DPUC To Reject Southern CT Gas Rate Increase, Instead Slash Rates By Several Million

May 26, 2009

Attorney General Richard Blumenthal today asked the Department of Public Utilities (DPUC) to reject Southern Connecticut Gas Company's (SCG) $34.2 million -- or 9.2 percent -- rate increase and instead slash rates by several million dollars.

Blumenthal said that SCG's own petition for a rate increase shows the need to decrease, not increase, the company's rates.

Blumenthal also recently called on the DPUC to slash Connecticut Natural Gas' (CNG) rates by at least $20 million.

"Both gas companies richly deserve no increase -- instead, a decrease -- reflecting economic facts and their own overreaching," Blumenthal said.

SCG acknowledges that gas costs will be $65 million lower than initially projected, more than a 25 percent drop. The company also vastly overstated its expenses for salaries, payroll performance incentives, retirement benefits and depreciation.

"The DPUC should completely and immediately reject Southern Connecticut Gas' unconscionable and untimely rate increase request," Blumenthal said. "Southern Connecticut Gas seeks more money from ratepayers when the facts warrant only a cut.

"Southern's own petition is exhibit A for a rate decrease, not increase. Gas prices have plummeted $65 million lower than the company expected, diminishing anticipated gas costs by 25 percent. The company has also carelessly overstated costs for salaries, payroll and retirement. This request must be rejected and rates slashed for struggling ratepayers.

"At a time when many of their customers are suffering lost jobs or lower wages, these companies should cut or control costs.

"If the companies wish to provide incentive plans to its executives and employees, they should be paid for by shareholders. These incentive plans encourage executives and employees to meet goals relating primarily to the company's earnings and profitability rather than performance for its customers."