For Immediate Release - February 05, 2009

DPU Reduces New England Gas Company Rate Hike

After six-month investigation, agency reduces natural gas rate increase proposed for Fall River and North Attleborough gas customers

BOSTON - The Department of Public Utilities (DPU) today approved new base rates for natural gas customers of New England Gas Company. Following a six month investigation, the DPU denied more than $6 million of a $9.7 million rate increase sought by New England Gas, cutting the company's proposed rate increase by roughly two-thirds. The DPU's action affects natural gas customers in Fall River and North Attleborough.

New England Gas, a subsidiary of Houston, Texas-based Southern Union Gas, filed its proposed $5.6 million rate increase - representing a proposed 20.2 percent increase in gas distribution revenues - on July 17. The company filed a request for an additional $4.1 million rate increase on September 16. Under the company's proposal, typical residential customers in the company's service area would have received estimated bill increases of up to $11 per month. Under the DPU decision announced today, the typical household instead will see an estimated increase of less than half that amount - or approximately $5.50 monthly.

Among the issues rejected by the DPU was a request by the company to recover a portion of corporate compensation paid to executive officers of the New England Gas parent company, Southern Union. The DPU determined that New England Gas did not demonstrate that large incentive and bonus payments made to Southern Union's top-level executive officers would benefit customers in Fall River and North Attleborough. Therefore, the DPU denied revenue recovery for corporate incentive compensation for Southern Union executives.

"This decision follows a comprehensive scrutiny of New England Gas Company's proposal and balances the need to hold the line on energy prices while permitting the company's system to continue to provide safe and reliable natural gas distribution service in Massachusetts," said Paul Hibbard, Chairman of the DPU.