Columbia Gas has asked permission from the state to increase its rate to customers which, if approved, would help pay for ongoing modernization of pipeline infrastructure.
Columbia Gas has asked permission from the state to increase its rate to customers which, if approved, would help pay for ongoing modernization of pipeline infrastructure.
Company spokesman Lee Gierczynski said Friday that Columbia Gas has filed paperwork with the state Public Utility Commission for the rate hike.
If the state agency grants permission for the increase, Columbia Gas said the monthly “average total bill” for a residential customer is expected to increase by 9 percent.
The company made it clear Friday why it is asking for the adjustment to its base rate: From 2007 to 2017, Columbia Gas spent more than $1.6 billion to modernize and expand its distribution system in Pennsylvania.
Of that, about $1.2 billion was spent on replacing nearly 1,000 miles of pipe. This year alone, the company plans on spending $274 million in Pennsylvania in the 26 counties it provides natural gas service.
If the PUC approves the request, Columbia Gas would get “an opportunity to earn a fair return on its infrastructure capital investments, but also enhance pipeline safety through a number of initiatives.”
“Multiple new pipeline safety rules and advisories are changing the manner in which we operate and will require additional training and new operating standards,” Mike Davidson, the vice president and general manager of the company, said in a news release.
In the filing submitted Friday, Columbia Gas said it is seeking an annual revenue increase of about $47 million.
In a news release, Columbia Gas took care to note that because of “continued low, stable natural gas costs,” customers’ bills will still be lower now than they were in 2006.
“We are working more efficiently than ever, and we will continue to look for additional ways to make the most cost-effective decisions and provide the most value for our customers. Even with this filing, the total average residential customer bill, when adjusted for inflation, would still be 21 percent lower in 2019 than it was in 2006,” said Michael Huwar, president and CEO of Columbia Gas.
In addition to residential customers, the potential rate increase would impact local businesses.
The company said if the rate increase is approved, the monthly bill for a “small commercial customer” will increase 3.8 percent and the monthly average bill for a “small industrial customer” would increase 31 percent.
Despite the filing announced Friday, customers shouldn’t expect their bills to go up anytime soon.
Columbia Gas said it could take up to nine months for the filing to be approved, and the new rates won’t go into effect until the end of this year.