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Columbia seeks yet another rate increase

Almost one year to the day from its 2014 rate increase filing, Columbia Gas of Pennsylvania is back before the Pennsylvania Public Utility Commission seeking an additional $46 million in revenue.

Columbia has continued its streak of rate cases, filing almost annually since the General Assembly passed the DSIC bill that was touted as being the antidote for frequent rate cases. In addition to seeking recovery of main replacement costs in excess of the 5% cap imposed by the DSIC statute, Columbia’s rate filing includes an innovative approach to extending its gas infrastructure to reach more customers.

PUC regulars will recall that in its last rate case, Columbia proposed a New Area Service rider (“NAS”) that allowed customers that did not have the ability to pay an upfront deposit for extending Columbia’s facilities to their premises to pay that amount, either the full or partial deposit, over a period of 20 years on a monthly basis. The testimony that was included in Columbia’s filing correctly points out that while the NAS program does help to mitigate one barrier to extending facilities, i.e., the sometimes significant upfront costs, it does not eliminate the cost, and those costs can add to customer’s bills for a long period of time.

In order to help, Columbia has proposed to develop new incentives that would encourage more customers to switch to natural gas service.  The first would be a footage allowance for up to 150 feet of main line extension per applicant without the need of a net present value (“NPV”) analysis that is normally done; the second would be an allowance of 150 feet of service line in normal situations for those portions of Columbia’s service territory where the Company has lines; and third would be reimbursement of up to $1,000.00 for installation of house piping where the projected revenues exceed projected costs by a certain threshold, when the Company does the (“NPV”) analysis.  What this means in real terms is that new customers will have the opportunity to receive gas service with an allowance of 150 feet of main-line extension and 150 of service line—at no charge, which should allow many new customers to connect to Columbia’s facilities.

With all these innovative programs that Columbia is proposing, it seems inevitable that they will have included a few items that parties will not like.  In this case, Columbia has resurrected, yet again, its intention to charge shopping customers for the right to shop, by seeking to impose upon them a substantial charge, Rider CAC (customer access charge) that purports to recover Columbia’s costs of providing choice service.  Columbia proposed the same Rider in its last rate case but withdrew it as part of a settlement.  It is interesting that this charge recovers substantially more dollars than Columbia purports to spend on its own gas acquisition; and, therefore, it is much larger in order of magnitude on a per customer basis than the charge that Columbia is proposing to recover for its gas procurement costs (“GPC”).  This seems a little odd to this observer.

This matter has not yet been assigned to an administrative law judge.  The Pennsylvania Office of Consumer Advocate has filed a complaint, which almost ensures that the rate filing will be suspended and sent for hearings before an administrative law judge sometime this summer.  Stay tuned.

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