Cumberland Times-News

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February 26, 2013

Columbia Gas to request rate hike

CUMBERLAND — Columbia Gas plans to file a rate increase request with the Maryland Public Service Commission that would increase rates just over 16 percent for average retail customers who purchase 70 therms of gas per month. A therm is 100 cubic feet of natural gas.

The actual monthly bill would rise from $67.93 to $79.18, or $11.25, if the rate increase is approved in full.

The PSC will require evidentiary and public comment hearings before making a decision on the rate increase.

    The company plans to file the increase today, according to a memorandum from the company explaining the request. “Because the price of natural gas is currently low and projected to remain ... so for the foreseeable future, this is the very best time to invest in the replacement of our aging system,” according to the memo.

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. Some of that work has occurred in the past few years in the Kitzmiller area.

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 Columbia is not able to mark up or profit on that portion of the bill, according to the memo.

“All of Columbia’s investments in pipes, meters and all of its expenses, including .... pipe repairs, emergency response and pipe inspection, are recovered through the base rate,” according to the memo.

Columbia maintains that, if adjusted for inflation, customers are paying 18 percent less for their total bill than in 1993. The upgrade to the pipelines and distributions has increased the company’s work force by 11 percent since 2011.

Columbia Gas spokesman Russ Bedell said he couldn’t comment until a rate increase is filed.

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

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