Yankee Gas outlines PBR proposal amid concerns from PURA on performance link

The evidentiary hearing for the Yankee Gas Rate Case, held by the Public Utilities Regulatory Authority (PURA) on June 30, 2025, focused on the proposal for Performance-Based Rate Making (PBR) for Yankee Gas. The discussions highlighted the potential benefits of adopting PBR, which aims to link utility performance to customer rates.

Mister Horton initiated the conversation by emphasizing the statutory and policy support for PBR in Connecticut, referencing Public Act 20-5, which encourages performance-based proposals in utility rate cases. He expressed disappointment that PURA had not adequately evaluated PBR within the extensive questioning process, raising concerns that customers might miss out on the benefits of PBR, such as rate stability and improved service reliability.

Miss Frayer added that PBR is not a novel concept, citing its successful implementation in various jurisdictions across the United States. She outlined the five key components of Yankee's PBR plan: a formula-based revenue adjustment, performance metrics, an earnings sharing mechanism, a capital funding mechanism, and a consumer dividend. These elements are designed to provide operational efficiency, transparency, and accountability, ultimately benefiting customers.

The proposed performance metrics include measures for safety, reliability, and customer service, with financial incentives tied to performance outcomes. The potential financial impact of these metrics could result in penalties of up to $3 million and incentives of up to $2 million for the utility.

The hearing concluded with questions from the Office of Consumer Council, focusing on the importance of linking performance to rates. The panel affirmed their commitment to adopting the proposed metrics, regardless of the broader PBR plan's acceptance.

Overall, the hearing underscored the ongoing discussions surrounding PBR in Connecticut, with advocates arguing for its adoption to enhance service quality and customer satisfaction while reducing the frequency of rate cases. The next steps in the process will determine whether PBR will be implemented for Yankee Gas, potentially setting a precedent for future utility rate structures in the state.