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Business & Economy

Columbia Gas rate increase up for hearing this week before state regulators

A Columbus Gas sign on West Nationwide Boulevard in Columbus.
Eye on Ohio
A Columbus Gas sign on West Nationwide Boulevard in Columbus.

Inflation may not be the only factor driving up natural gas bills in the new year.

A leap in Columbia Gas of Ohio's fixed monthly charges and cuts to their energy efficiency programs are the topic of discussion during an evidentiary hearing scheduled for Wednesday before the Public Utilities Commission of Ohio.

The commission's members are expected to make a final decision in the natural gas supplier's rates for 1.4 million customers in Ohio in the weeks following the meeting.

The hearing comes after an announcement at the end of October that several of the stakeholders weighing in on the case reached a stipulated agreement with Columbia Gas.

The company filed an application with the PUCO in June 2021. It asked for an increase in annual revenue of $212 million with an increase in the fixed monthly rates consumers pay that would rise each year until it reaches $80 in 2026.

Residential users now pay about $36 a month in fees.

Consumer advocates like the Ohio Consumers' Counsel protested the deal, arguing the company should be limited to $10 million in increased revenue. The PUCO staff report also found the company should be limited to $60 million in increased revenue.

But now the OCC and the PUCO are behind an agreement with Columbia Gas that allows the company to generate $68 million in new revenue, with about $64 million shouldered by residential consumers who would pay more each year until it reaches nearly $60 a month in 2026.

Other stakeholders that approve of the deal include the Retail Energy Supply Association, the Northeast Ohio Public Energy Council, Industrial Energy Users of Ohio, the Ohio Manufacturers’ Association Energy Group, the Kroger Co., the Ohio Schools Council, the Ohio Energy Group and the Interstate Gas Supply Inc.

But senior attorney Robert Kelter at the Environmental Law and Policy Center said the deal is no good.

“They asked for a ridiculously high amount that had zero chance of getting approved to make it look like they've moved towards something reasonable," he said.

He said charging people $60 a month before they consume a single therm of gas is "off-the-charts ridiculous."

The OCC said their support of the measure comes after negotiations saw the company lower their requested monthly increase.

According to filings at the PUCO, one of the OCC negotiators Kerry Adkins retired in 2018 from overseeing rate case analysts at the PUCO.

Columbia Gas representatives said the agreement "benefits Columbia’s ratepayers and is in the public interest by bringing a compromised resolution to this proceeding with a majority of the parties."

Kelter said Ohio's consumers will lose out if the deal is approved.

"The residential customers don't have the power to fight for themselves in this process, the way that commercial and industrial customers do. So, they're getting the short end of the stick," he said.

Kelter also takes exception to an element of the proposal that would eliminate an energy efficiency program for users who aren't considered low-income.

"Columbia Gas has figured that it's worth it to get rid of those programs, if in fact, they can get the increase in the fixed customer charge that they want," Kelter said.

The OCC says the program will save $100 million. But Kelter said it helped people reduce their usage, benefitting the environment and their bills. He said the elimination moves in the wrong direction when it comes to environmental efficiency.

"Essentially, they've sold their customers down the river, in the name of profits," he said.

Tom Bullock, executive director of the Citizens Utility Board of Ohio agrees with Kelter, according to testimony filed in the PUCO case.

"High fixed charges hurt low-usage customers more than high-usage customers, almost by definition. Yet, in this case, both low and high use customers lose. High fixed charges can significantly reduce incentives for consumers to reduce their consumption of natural gas. Thus, low usage customers will experience a greater percentage increase when fixed charges are increased. Thus, it is not in the public interest to force upon customers’ rates that target those that use less energy for higher bills, and at the same time discriminate against those low and moderate income customers who are already having a difficult time making ends meet," his testimony states.

Kelter said the PUCO should send the parties back to the drawing board because of the fixed charge and because the elimination of the energy efficiency program goes against the PUCO's move toward better efficiency.

Business & Economy
Renee Fox is a reporter for 89.7 NPR News.