Cathy Jett is the assistant business editor at The Free Lance-Star, and specializes in covering the area's retail scene.
Columbia Gas seeks increase in base rates
Columbia Gas of Virginia has filed a request with the Virginia State Corporation Commission to increase annual base rates effective with its October bills.
Base rates include only those costs associated with the delivery, distribution and customer services operations, which make up about 44 percent of a customer’s total bill. The remaining 56 percent are natural gas commodity costs, which aren’t included in the request.
According to Columbia Gas, the increase is needed to recover investments and other costs associated with its four-year effort to replace aging infrastructure and expand facilities, which enabled it to reduce greenhouse gas emissions by reducing leaks in its system.
“We have also expanded the resources dedicated to enhancing pipeline safety programs. These efforts are providing tangible benefits to the customers and communities we serve across Virginia,” Carl Levander, president of Columbia Gas of Virginia, said in a press release.
Other components of Columbia’s request include implementation of an automated meter reading system, which it said will lead to a 70 percent reduction in meter reading costs, and a proposal to transition to a billing process based upon the heat content of the natural gas actually consumed by a customer, rather than the volume of natural gas delivered.
This is the first time that Columbia Gas of Virginia has requested a base rate increase in four years.
If approved by the SCC, the change would adjust the total monthly natural gas bill for a typical residential customer by an average of $6.90 per month ($82.77 per year). This comparison is based on the current rates in effect as of April 30, 2014 and 683 Ccf in annual usage.
The rate proposal contains a request for a net increase in revenues of $24.9 million per year, and a request to include in base rates $6.9 million currently being recovered through Columbia’s infrastructure replacement program under a separate rate mechanism.
The filing, which requests a total increase of $31.8 million per year including both items, marks the beginning of the public process of setting base rates for a regulated utility, as required by the SCC. A decision is expected by the end of the year.
Cathy Jett: 540/374-5407