Cumberland Times-News

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September 3, 2013

Appeal filed in Columbia Gas rate hike case

CUMBERLAND — Neither consumer representatives nor Columbia Gas were happy with a judge’s decision to grant a rate increase to Columbia Gas. The company and the Office of People’s Counsel, which represents customers, have filed appeals in the case.

The appeals were filed with the Maryland Public Service Commission.

The public utility law judge’s order would have begun Aug. 23 but for the appeals. His proposed order granted part of a rate increase requested by Columbia Gas, but doesn’t give the company the full rate increase it had requested. The appeals will be heard by the full commission.

Columbia’s appeal is based on one significant decision the judge made, according to the company’s appeal. The judge denied the company’s request to have cleanup costs of a contaminated property in Hagerstown considered in determining the rate increase request.

“The proposed order will also have a materially averse financial impact upon Columbia,” according to company documents filed with the PSC.

While the background to the ownership of the property is complex, Columbia said its ownership will actually result in lower cleanup costs than any other scenario for cleanup and benefit ratepayers. The company said previous cases either agreed with their position or had different circumstances that made the previous rulings inapplicable to the company’s case.

The OPC appealed three parts of the rulings, all dealing with calculations that impacted the final rate in the judge’s proposed order. It said part of the judge’s calculations did not follow previous PSC practice and decisions.

Neither the company nor the OPC offered a take on how their appeals, if granted, would impact the final rate increase.

The company originally sought a revenue increase of about $5.6 million, with an overall rate of return of 8.2 percent.

The OPC and PSC staff contested a number of the adjustments to rate base and operating income proposed by the company, according to PSC documents.

The proposed order would have given the company a revenue increase of $3,869,227 and an overall rate of return of 7.528 percent. If Columbia had been granted the full rate increase, it was projected to increase monthly rates for customers from $67.93 to $79.18 for 70 therms of gas a month.

OPC attorneys said the company should not be awarded an overall rate of return greater than 6.8 percent and the revenue increase granted the Company should not exceed $1.509 million.

A therm is 100 cubic feet of natural gas, officials said.

It’s unclear how much the reduced increase will cost consumers.

A public hearing on June 11 in Cumberland brought out a number of residents concerned about the increase.

The company said a rate increase will help the company recoup nearly $26 million in capital costs for improving the distribution pipelines, including replacing more than 190,000 feet of aging pipe.

The increase is on the company’s distribution rate, not the total bill.

Columbia said about 50 percent of a customer’s bill is based on the price of natural gas and it is not able to mark up or profit on that portion of the bill.

More information can be found by searching case 9316 at http://webapp.psc.state.md .us/Intranet/home.cfm.

Contact Matthew Bieniek at mbieniek@times-news.com.

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