US Senator Richard Blumenthal, D- Connecticut, announced new bipartisan legislation on Friday that would help consumers reclaim millions of dollars of overcharges from natural gas companies.
Along with Senator Cindy Hyde-Smith, R-Mississippi, Blumenthal introduced the Making Pipelines Accountable to Consumers and Taxpayers Act (MPACT). The bill aims to close a loophole that allows natural gas companies to overcharge consumers and not issue refunds.
“We must close a legal loophole that natural gas pipeline companies have used routinely and reprehensibly to exploit consumers. The companies overcharge consumers who are unable to receive full reimbursements under current law,” said Blumenthal. “This is a matter of simple fairness: if consumers are overcharged for a utility, they should be made whole. With the Making Pipelines Accountable to Consumers and Taxpayers Act, we can hold natural gas pipeline operators accountable for stealing money out of consumers’ pockets and ensure that those consumers are paying only the correct, reasonable rate.”
Under current federal law, the Federal Energy Regulatory Commission regulates the rates that natural gas companies can charge. The Commission can order the companies to lower their rates, but it cannot order them to issue refunds for charges the Commission found to be unreasonable.
“This legislation is a matter of basic fairness to consumers in Mississippi and elsewhere, whether they use natural gas to cook meals or heat a poultry house. Right now they have no recourse or chance for a refund when an interstate natural gas pipeline makes millions of dollars in overcharges,” Hyde-Smith said. “We need this legislation to close this loophole and ensure natural gas pipeline regulations are transparent for the American people.”
Gas companies in Connecticut have overcharged consumers to the tune of millions of dollars. In 2023, Attorney General William Tong called for a new rate hearing and the issuance of refunds after the attorney general’s office studied Connecticut Natural Gas Corporation’s earnings reports. The analysis found that CNG was earning more than its publicly authorized return on equity of 9.3%. As a result, the company collected more than $8 million more than it should have.
“CNG is profiting off the backs of Connecticut families and businesses. We pay far too much for our utilities as it is. We should not be charged a penny more than needed. Connecticut ratepayers should not be subsidizing CNG shareholders,” said Tong at the time of the overcharge discovery.
An analysis of wholesale natural gas prices by the U. S. Energy Information Administration found that the wholesale cost of natural gas in 2022 had reached the highest annual average since 2008, and had increased by 53% from 2021, representing the fourth largest jump on record. These price increases were attributed to declining national production and high withdrawals of natural gas from storage.
Industry groups praised the proposed legislation, as well as natural gas companies in Connecticut. Avangrid CEO Pedro Azagra joined with Blumenthal on March 11 at Connecticut Natural Gas headquarters to support the legislation, as it would bring some level of oversight to interstate natural gas pipeline-owning companies, which are regulated by the Federal Energy Regulatory Commission.
“We at CNG and SCG commend Senator Blumenthal for tackling this important issue and helping to ensure that the companies that own interstate natural gas pipelines are charging just and reasonable rates at all times and that rates can be reduced faster if necessary,” said Sarah Wall Fliotsos, CNG/SCG spokesperson. “Natural gas distribution companies like CNG and SCG are fully regulated, with our costs transparent to customers and policymakers alike. Because we pass interstate charges on to our customers at cost, any savings from this effort would benefit our customers, and we thank Senator Blumenthal for prioritizing it.”
The bill would ensure there is some degree of transparency, which distribution companies like CNG are held to through the regulated process of the Public Utilities Regulatory Authority.
