Connecticut Attorney General's Office

Press Release

Attorney General:  Shield Utility Customers From Rate Increases Resulting From UI’S Acquisition Of Gas Companies

September 15, 2010

            Attorney General Richard Blumenthal today said the takeover of Connecticut Natural Gas (CNG) and Southern Connecticut Gas (SCG) by United Illuminating Company’s (UI) parent company, UIL Holdings Corporation (UIL), should be rejected unless ratepayers are shielded from rate increases and allowed to share in any benefits resulting from the purchase.

   Blumenthal said the proposed transaction includes tax provisions that could cost ratepayers more than $21 million a year in higher rates.

            The Department of Public Utility Control (DPUC) is reviewing an application by UIL and Iberdrola USA, Inc. for UIL to acquire ownership of CNG and SCG.

            Blumenthal said the companies have failed to prove to the DPUC that UIL’s acquisition of the two gas companies is in the public interest, as required by law. He urged the DPUC to reject the transaction unless it can ensure that ratepayers are protected from future rate increases and are allowed to share in any benefits from this merger.

“We are seeking an iron-clad promise of protection that ratepayers will be better off -- not burdened -- by this merger,” Blumenthal said. “UIL should be required to shield ratepayers from rate increases, share benefits and provide improved service as a result of its takeover of the gas companies.

“The companies have so far failed to offer any real benefits to consumers, such as cost savings or improved service.”

State law bars any company from taking control over a regulated public service company in Connecticut without DPUC approval. The DPUC must investigate and hold a public hearing on such applications to determine whether the transaction is in the public interest.