New Castle News

Closer Look

March 26, 2014

Columbia Gas wants 10.4 percent rate hike

NEW CASTLE — Columbia Gas is seeking a rate increase that would boost residential bills by more than 10 percent.

The company said the proposed hike, filed with the Pennsylvania Public Utility Commission, is intended to recover the cost of various infrastructure improvements in the state. The additional amount requested is $54.1 million.

If the hike is approved by the PUC, residential customers of Columbia Gas would see a boost of 10.4 percent in rates, while commercial customers would have an increase of 7.6 percent. According to Columbia Gas, a residential customer who uses 72 therms of natural gas per month would see rates rise from $87.12 to $96.20 per month. For a commercial customer that purchases 467 therms of gas per month, the proposed increase would raise rates from $412.47 to $443.88 per month. An industrial customer using 10,733 therms of gas per month would see a billing increase from $8,201.77 to $8,704.03 per month, or 6.1 percent.

Mark Kempic, president of Columbia Gas of Pennsylvania, defended the request by saying, “We believe this filing is a fair and reasonable request that provides a number of tangible benefits to our customers and the communities we serve.”

Since 2007, Columbia Gas said, it has invested more than $700 million to modernize and expand its distribution system in Pennsylvania. Of that amount, more than $540 million was used to replace nearly 570 miles of aging pipe. In 2014, Columbia said, it will spend $188 million in Pennsylvania, with more than $145 million of that amount directed to pipeline improvements.

In addition, Columbia said, its rate hike request would promote pipeline safety through enhanced training and technological system improvements designed to reduce the amount of damage done to gas lines by third parties who hit or dig up lines. The company cited such damage as the top safety risk to its gas distribution system.

In defending the rate increase request, Kempic said that “even with this filing, the total average residential customer bill, adjusted for inflation, would still be 16 percent lower than it was 20 years ago.”

The process for a general rate proceeding before the PUC can take up to nine months. Columbia said it is anticipating any rate increase would take effect at the end of this year.

Under state law, the PUC will examine Columbia’s request and conduct hearings. The commission can approve or reject the rate hike request. It also can adjust it lower before putting it into effect.

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