ProvGas Touts Cost Recovery Program
Under the "Energize RI" program, Providence Gas Co. (ProvGas)
has been awarded $2.45 million by the Rhode Island Public Utilities
Commission (PUC) for losses attributable to external forces the
utility experienced last winter. The original request was granted
by the the PUC's Division of Public Utilities and Carriers (the
Division) in March but it was subject to PUC approval.
ProvGas said the payment proves that the three-year program,
designed to improve the state's gas infrastructure without raising
customer rates or putting the utility at risk, is a success.
"The winter weather in the northeast, combined with the
precipitous drop in oil prices, was far outside the norm we
generally experience in New England," said James Dodge, CEO of
ProvGas. "The implementation of this latest step and the settlement
agreement by the parties to Energize RI address the stabilization
goals of the program-recall that we lowered rates by 4% initially
and froze rates at those levels for three years-and demonstrates
that the program functions for the benefit of all constituencies."
Due to the Energize RI program, which started in 1997, ProvGas
made $75 million worth of infrastructure improvements and
customers' bills were cut 4% then frozen for three years. In
exchange for these benefits, the program allows ProvGas to ask the
Division for repayment due to exogenous circumstances, such as last
winter's warm weather and low oil prices. It also limited the
volatility of gas costs by allowing the utility to lock in gas
"It really has been a win-win for everybody. For us, we were
able to recover costs and take out the peaks and valleys many
utilities experience," James Grasso, a ProvGas spokesman said.
"There is no other program in the country like this, and because of
its success, I think there is a general interest on the PUC's side
and ours to continue it."
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