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Yankee Gas Services Company
P.O. Box 270
Hartford, CT 06141-0270
Yankee Gas Rate Case Settlement Agreement Approved
Ensures ability to continue providing safe, reliable natural gas service
Sandy St. Pierre
BERLIN, Conn., December 3, 2004, (NYSE:NU) –
A negotiated settlement between Yankee Gas Services Company, the Office of Consumer Counsel (OCC) and the Prosecutorial Division of the Department of Public Utility Control (DPUC) for a rate increase has been approved by the DPUC in a draft decision issued today. The DPUC will issue a final decision on December 8, 2004. The settlement agreement allows for a $14 million, or 4.1 percent increase in rates, effective January 1, 2005. It also reduces Yankee’s allowed return on equity (ROE) from the current 11 percent to 9.9 percent and requires Yankee to share equally with customers any earnings in excess of its allowed ROE.
Through this negotiated settlement, Yankee agreed to not file for new rates to be effective prior to either the in-service date of its liquefied natural gas (LNG) facility in Waterbury or July 1, 2007, whichever comes first. And, Yankee will continue to be measured by its existing DPUC-approved Service Quality Plan until its next rate case. Since Yankee began measuring service quality in 2002, the Company has consistently met or exceeded all of its performance metrics. Yankee Gas filed its rate application on July 2, 2004 and requested a $26.5 million, or 7.2 percent, increase in rates. The rate request was based on rising costs related to pensions, wages and healthcare, maintaining current service levels for customers and increased investments in plant. In 2003, Yankee
earned approximately half of its allowed ROE of 11 percent and when compared to the Consumer Price Index—All Urban measure of inflation, Yankee’s rates actually declined on a relative basis by approximately 22.4 percent since 1993.
“We appreciate the Department’s decision to approve this agreement and the willingness of the OCC and the Prosecutorial Division to work with us to reach consensus on a settlement that is reasonable and in the best interest of our customers and our shareholders,” said Dennis E. Welch, president and chief operating officer of Yankee Gas. “We are proud to have a solid track record of delivering superior service to our customers. And while this rate relief is badly needed to maintain that level of service, it also encourages us to continue to find ways to reduce our costs and to improve service to our customers while at the same time delivering value to our shareholders,” said Welch.
Connecticut Consumer Counsel Mary Healey also supports the settlement agreement. “Although higher utility rates are never popular, especially during this time when all energy costs are so high, this settlement agreement is important because it supports our regulatory mandates to deliver energy safely and reliably to consumers across Connecticut in a cost-effective manner. My office worked diligently in this case on behalf of customers, obtaining substantial monetary concessions from Yankee over what it had proposed while at the same time ensuring commitments for maintaining high levels of service.”
Yankee Gas Services Company (Yankee Gas) is Connecticut’s largest natural gas distribution company, delivering safe, reliable natural gas service to approximately 194,000 customers in 71 cities and towns. Yankee Gas is expanding Connecticut’s energy options and increasing customer choice by extending the availability of clean, efficient natural gas throughout the state. Yankee Gas is part of the Northeast Utilities System (NYSE: NU). For more information, please visit
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