PURA hearing features dispute over Yankee Gas ROE, equity ratio and use of option-implied betas

Eversource witnesses and opposing experts spent hours at a Public Utilities Regulatory Authority (PURA) hearing disputing how to set Yankee Gasauthorized return on equity (ROE) and capital structure, matters that determine how much customers pay and how the utility raises money.

The company presented a cost-of-capital panel that included Eversource finance and regulatory witnesses and outside consultants. Company filings and witness testimony showed the companyrequested an authorized ROE in the neighborhood of 10.3% and proposed a capital structure with roughly 53.81% common equity; company witnesses also provided forecasts for proposed long-term debt pricing if issued during the rate year. PURA staff, the Office of Consumer Counsel (OCC) and the Office of Education, Outreach and Enforcement (EOE) pressed witnesses on methodology and data.

Why it matters: The ROE and equity share are central to the utilityrevenue requirement; a higher authorized ROE or larger equity ratio increases the utilitycustomersrates, while too low an ROE can affect a utilitycost of access to capital.

Key positions and numbers

- Eversource witnesses explained the companyproposal and provided debt-pricing estimates (example: a 10-year new-issue rate near the mid-5% range and a 30-year near the mid-6% range when priced in the record). The company also sought permission to file investor reports as late-file exhibits.

- Doctor William (Woolridge) (Office of Consumer Counsel consultant) testified on a range of ROE and capital-structure positions. In…