Some 36,000 Columbia Gas customers in Northern Virginia could see decreases in their monthly natural gas bill.
Columbia Gas has applied to Virginia’s primary regulatory agency, the State Corporation Commission, to freeze delivery and other non-gas rates until 2011 as part of an application for a new rate system. The last rates were last changed was 1998.
Columbia Gas will lose an estimated $66 million by freezing the rates. As part of the deal, however, it will be able to expand its service area and improve infrastructure over the five years, accordingto the application.
Those changes will enhance the company’s efficiency and boost customer levels more effectively than is possible under the current rate structure — helping to recover those losses, said Bob Innes, a Columbia Gas spokesman.
“The money we make is through the volume of gas that we sell and the infrastructure of the rate base,” Innes said. He said that the new rate system, which uses performance-based rates, is cheaper, not as time-consuming and less risky for the company to use than the standard rate base system.
Virginia Natural Gas and Columbia Gas are the first two PBR cases to be heard since the General Assembly changed the law for the options in rate regulation in 1996, said Andy Farmer, a commission spokesman.
A performance-based rate “helps us hold the line on rates and provides increased incentive to implement [tools] to operate as efficiently as possible, which may allow the company to earn a slightly higher rate of return,” said Tim Sergeant, a spokesman for Washington Gas, which serves 432,000 customers in Virginia. “In general, benefits are shared between the customer and the company.”
Washington Gas has yet to file similar cases, but is interested in the outcomes of the Virginia cases, Sergeant said.
Quick bits
» Average monthly bill is $150
» Gas rates expected to drop this week
» Comments on Columbia Gas’ proposal due Nov. 29
» Copy of the application can be found at www.scc.virginia.gov
