In a recent evidentiary hearing held by the Public Utilities Regulatory Authority (PURA) regarding the Yankee Gas Rate Case, discussions centered on the nature of U.S. Treasury bonds and their perceived risk. The hearing, part of an ongoing evaluation of gas rates, highlighted the complexities surrounding financial instruments that are often considered "risk-free."

A key point raised during the session was the characterization of U.S. Treasury bonds. While they are commonly viewed as a safe investment, experts noted that they do carry inherent risks. For instance, a witness pointed out that Treasury bonds have a non-zero beta, indicating that they are not entirely free from risk. This assertion was underscored by the recent bankruptcy of Silicon Valley Bank, which had significant holdings in these bonds, illustrating that even government-backed securities can be subject to market fluctuations and risks.

The discussion also touched on historical yield rates, with a reference to the average yield of the 30-year Treasury bond being approximately 3.11% in 2018. This figure was acknowledged by participants as a point of reference, although it was noted that verification would be necessary.

The hearing's focus on the financial implications of Treasury bonds is significant for the broader context of gas rates and utility pricing. Understanding the risks associated with these bonds can influence how utilities manage their financial strategies and, consequently, how they set rates for consumers.

As the evidentiary hearing continues, the implications of these discussions may affect future regulatory decisions and the financial landscape for utility companies in Connecticut. Stakeholders are keenly watching how these insights will shape the ongoing deliberations and the eventual outcomes of the Yankee Gas Rate Case.