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Columbia Gas Again Asks Pennsylvania PUC For More Revenue

NiSource Inc. subsidiary Columbia Gas of Pennsylvania has filed another request with the Pennsylvania Public Utility Commission (PUC) for an annual revenue increase of $55 million to fund continuing upgrades of its underground distribution infrastructure and training for pipeline safety and regulatory compliance.

In a filing last week, Columbia requested that the PUC adjust its base rates for distribution service to help fund the $210 million it plans to invest in the state this year, including more than $160 million for upgrading aging natural gas distribution pipelines. If approved, the additional revenue would also help the company enhance its pipeline safety programs.

"Multiple new pipeline safety rules and advisories are changing the manner in which we operate and will require additional training and new operating standards," said Columbia Vice President Mike Davidson.

Since 2007, Columbia has invested nearly $1.1 billion to modernize and expand its distribution system across a 26-county service territory in the state. Of that, $845 million went toward the replacement of more than 744 miles of pipeline. The utility serves 420,000 customers in western and southeastern Pennsylvania.

If the PUC approves the company's proposal, an average residential customer's bill would go from $77.33 to $86.97 per month, or an increase of about 12%. Small commercial customers would see their bills increase about 9% to $139.74 on average, while a small industrial customer's bill would increase about 7% to $958.60. Even with the increases, Columbia President Mark Kempic said the average residential bill, adjusted for inflation, would still be 29% lower in 2017 than it was in 2006.

Natural gas supply costs generally represent about a third of a residential customer's bill. Utilities in the state purchase their gas on the wholesale market and under state law pass those costs onto customers without a mark-up. A general rate proceeding can take up to nine months at the PUC. Columbia said it hopes to have the new rates in effect by the end of the year.

Columbia filed a similar rate increase request in March 2015, seeking $46.2 million in additional revenue to fund infrastructure upgrades (see Daily GPIMarch 24, 2015). In December, the PUC approved a settlement that cut the request by 39% to $28 million and left Columbia's monthly residential customer rates unchanged (see Daily GPIDec. 8, 2015).

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