CNG, SCG Statement on Appeal of PURA’s Rate Case Decisions to Connecticut Superior Court

PURA’s $35 million cuts leave SCG and CNG “without sufficient revenues or the ability to maintain financial integrity… [to] provide the level of safe and reliable service to customers that they expect to receive” 

Companies also cite “a series of procedural irregularities” that call for reversal by Superior Court, including “the use of unlawful procedures, ex parte communications, and other improper conduct by the PURA Chairman” 

Link to CNG appeal HERE. Link to SCG appeal HERE. 

ORANGE, Conn. — December 20, 2024 — Today, Connecticut Natural Gas (CNG) and Southern Connecticut Gas (SCG), subsidiaries of Avangrid, Inc. (NYSE: AGR), appealed the November 18, 2024 Final Decisions in the CNG and SCG rate cases (Docket #23-11-02) by the Public Utilities Regulatory Authority (PURA), which cut the combined revenues of the companies by $35 million, to Connecticut Superior Court. In the comprehensive appeal filings, CNG details 13 counts of Claims of Error on Appeal and SCG details 14, which range from PURA’s arbitrary and capricious disallowances of unavoidable operating costs resulting in unjust and unreasonable rates to violations of process and procedure that have deprived the companies of due process. 

“Nearly 400,000 residents and businesses across Connecticut rely on the safe and reliable service that CNG and SCG provide, but PURA’s Final Decisions in the companies’ rate cases threaten the critical investment and quality of service that our customers deserve,” said Frank Reynolds, President and CEO of CNG and SCG. “Our companies, with a legacy of exceptional service spanning nearly two centuries, cannot, and will not, accept these consequences. Today, we asked the courts to step in to protect our customers from the coming harms of PURA’s unbridled, arbitrary cuts, which will cripple our ability to make critical investments in the safety, reliability, and resiliency of the natural gas distribution system.” 

In the appeal, the companies argue that the effect of PURA’s “arbitrary and capricious decision-making” is a violation of both Connecticut statutory requirements and the United States Constitution under the Takings and Due Process clauses. CNG and SCG argue that PURA’s arbitrary disallowances of unavoidable operating costs inexplicably ignore the effects of inflation and other cost increases that have occurred since revenues were last set in 2016, making the decisions irreparably harmful to the companies’ financial integrity. 

As evidence for the harmful effects of PURA’s cuts, the companies include the recent credit rating downgrades from both Standard & Poor Global (S&P) and Moody’s Ratings. S&P downgraded CNG by two notches to BBB+ and SCG by one notch, also to BBB+. Moody’s downgraded both companies by one notch, CNG to A3 and SCG to Baa1. Both rating agencies highlighted no other factor contributing to the downgrades except Connecticut’s regulatory environment, epitomized by the $35 million in revenue cuts handed down by PURA on November 18.  

CNG and SCG also point to unlawful procedures and processes that have marred the companies’ due process rights throughout the case. These include the apparent nonpublic self-appointment of the PURA Chairman as presiding officer without the vote of the full panel of PURA commissioners, the ex parte communications between the PURA Chairman and a party to the case (the PURA Office of Education, Outreach, and Enforcement [EOE]), and PURA Chairman’s apparent unilateral decisions on 118 preliminary motions in the cases under the PURA Executive Secretary’s signature block. As the appeal states, these and other procedural irregularities were only revealed by the companies’ Freedom of Information requests, not by any proactive measures by PURA on its own. 

The companies conclude their appeals by asking the Connecticut Superior Court to reverse or vacate PURA’s Final Decisions, remand the case back to PURA, and grant “other relief as the Court deems just and proper.” PURA has until January 23, 2025 to respond to the appeal.