Connecticut’s Department of Public Utility Control (DPUC) was asked by the state attorney general Tuesday to reject a 9.2% rate increase proposed by Southern Connecticut Gas Co. (SCG).

The Energy East subsidiary delivers natural gas to 165,000 customers in 22 Connecticut communities. SCG in January filed with the DPUC to increase rates “to reflect the current economic conditions and ensure that the company has sufficient financial strength and resources to continue to invest in critical energy infrastructure and provide safe and reliable service for its customers” [No. 08-12-07].

SCG proposed a $50.1 million annual base delivery rate increase, which would be 15% above the revenues produced by its existing rate schedules. A typical residential heating customer’s bill would have increased by about 62 cents/day, the filing indicated. The proposed new rates and a decoupling proposal, if approved, were to take effect by July 19. Earlier this month SCG revised its application because of a “significant decline in total gas costs,” and it now is requesting a rate hike of $34.2 million, or a 9.2% increase to its current base rates.

In a filing Tuesday, Attorney General Richard Blumenthal said SCG’s proposed rate increase should be rejected “in its entirety. The company’s application is entirely without merit. SCG completely failed to show that its rates are less than just and reasonable” as required under state law. “SCG’s financial condition is not as bleak as the company claimed in its application…Moreover, many of the revenue requirements that the company proposed are vastly overstated, including payroll, salaries, incentives, post-retirement benefits and rate case expense.”

Blumenthal also asked the DPUC to reject SCG’s decoupling proposal “because it unfairly shifts risk from shareholders to ratepayers.” The attorney general said SCG, “like its customers, should learn to tighten its belt and do more with less.” He said rates also should be cut at Connecticut Natural Gas, which has a rate hike request on the DPUC docket [No. 08-12-06].

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

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