New State Budget includes tax relief for NPU natural gas customers

Customers will no longer be assessed gross receipts tax on natural gas

Natural gas customers of Norwich Public Utilities (NPU) will see a reduction in their monthly bills as a result of a provision in the recently approved state budget that exempts the utility from the state’s gross receipts tax.

NPU has approximately 10,000 natural gas customers and the average residential customer will see a decrease of approximately 4% on their bill each month; commercial customers would see a decrease of 5%. The tax cut goes into effect on July 1, 2022, and NPU is currently working to have the tax cut incorporated into its billing system.

“Our local legislative delegation has delivered for our customers in a big way, and we appreciate their time and effort on this important issue,” said NPU General Manager Chris LaRose. “State Representative Emmett Riley, along with State Representative Kevin Ryan and State Senator Cathy Osten, clearly understand the significance of providing tax relief for our natural gas customers, many of whom continue to struggle financially as the pandemic continues.”

As a municipally-owned entity, NPU is a not-for-profit organization and therefore is tax exempt, with one exception before last week. NPU, the only municipal gas company in Connecticut, paid the gross receipts tax on the natural gas that is purchased for its customers. Over the past five years, NPU natural gas customers have paid more than $4.5 million to the state through this tax.

Norwich-area legislators worked to have a provision included in the state budget that now exempts municipally-owned natural gas companies from the gross receipts tax.

This targeted tax relief is all the more important as energy prices have risen dramatically for NPU and utility companies everywhere.