The New London (Conn.) Day
Column: Overcharging by interstate natural gas pipeline companies has impact in Norwich
By Chris LaRose
Understanding the production, transportation, regulation and charges for natural gas can be confusing if not frustrating on the best of days. And the legislative process in Washington isn’t much better.
So, a proposal to fix a problem that has allowed 20 of the most powerful interstate natural gas pipeline companies to overcharge customers by $1.3 billion since 2022 would seem to be pretty daunting.
But a bill recently introduced by U.S. Senator Richard Blumenthal, D-Conn., aims to cut through some of the bureaucratic red tape and empower the Federal Energy Regulatory Commission (FERC) to force these companies to return the money they’ve overcharged to natural gas customers across the country, and potentially to our 10,000 customers here in Norwich.
In recent years, utility bills across the United States have increased substantially; even though NPU rates for electricity and natural gas are well below those of investor-owned utilities in Connecticut, we know that many of our customers feel the impact of inflation and the economic after-effects of the pandemic every month. While we are very proud of the programs and services we provide to help thousands of our customers each year, there are bigger, more challenging systematic obstacles that impact natural gas customers that must be addressed by a change in federal law.
The 1938 Natural Gas Act (NGA) and the 1935 Federal Power Act (FPA) established the federal government’s authority to regulate rates charged for transporting natural gas and electricity in interstate commerce. Both laws allow the Federal Energy Regulatory Commission (FERC) to lower rates if the current rates are deemed to be too high. If FERC determines an electric rate is unjust or unreasonable, they can order the electric utility at fault to refund any overcharges from the time the complaint was filed.
With natural gas, it’s a different story.
The NGA does not grant this same refund authority to FERC, so there is no incentive for pipeline companies to finalize rate cases in a timely manner, allowing overcharges to build for years — totaling billions of dollars — and leaving natural gas users with no recourse.
Without question, FERC’s lack of refund authority increases consumer energy costs. This poses a significant challenge for the 1,000-plus public natural gas systems, like NPU, who prioritize keeping rates low for the communities they serve.
Senator Blumenthal’s bill, the Making Pipelines Accountable to Consumers and Taxpayers (MPACT), would add the needed refund authority to the Natural Gas Act and could provide millions of dollars in refunds to customers who have been overcharged for their energy costs and help reduce future excessive energy rates for consumers.
Both chambers of Congress have devoted considerable attention towards prioritizing reliable, affordable and efficient energy. Even in the current state of polarized politics, it’s an area where Democrats and Republicans can agree.
Senator Blumenthal’s bill has the support of his conservative colleague from Mississippi, Senator Cindy Hyde-Smith, and we are hopeful that this common sense-solution to a longstanding and significant issue will be approved by Congress and signed into law by President Biden.
If and when this bill becomes law, natural gas customers in Norwich and across America would clearly benefit.
Chris LaRose is General Manager of Norwich Public Utilities.