PUCO Approves Southeastern Emergency Rate Increase

The Public Utilities Commission of Ohio (PUCO) has approved an emergency rate increase for former customers of Paramount Natural Gas Co. who are now served by Southeastern Natural Gas Co. Under the terms of the ruling, a typical customer currently paying $76.52 will see his bill increase to $81.74 for 8 Mcf per month.

The rate increase was approved to allow Southeastern to meet "revenue deficiencies" sustained by Paramount from 1995-2000. During the five-year period Paramount's operating revenues were insufficient to meet operating expenses. Southeastern, which acquired Paramount late last year, claims "these ongoing losses jeopardize its ability to provide quality natural gas service to its customers, including Paramount's former customers."

PUCO's order states, "Southeastern has presented sufficient evidence to allow the commission to conclude that the circumstances confronting the company constitute an emergency" and "absent emergency rate relief, its business may be financially imperiled and its ability to render service may likewise be impaired." The order continues, the emergency relief "is the minimum level of relief required to enable Southeastern to avert or relieve the present financial emergency it faces."

The current order will allow Southeastern to collect temporary relief through a uniform surcharge of 25.57% to the net bill for commodity sales to its former Paramount customers until PUCO can consider the pending application for permanent rate relief.

PUCO also enacted an order clarifying that regulated utility companies need to follow specific steps before disconnecting consumers for non-payment of a winter heating bill. The commission issued the order just before the moratorium for electric and natural gas heating disconnections ends on Monday, March 26.

The commission's order states "companies can pursue disconnection for delinquency (non-payment of a bill) only after serving, after March 26, 2001, new 14-day disconnection notices and additional 10-day notices, along with the applicable 24-hour notices prior to disconnection."

In other PUCO action, the staff of the Ohio Power Siting Board has recommended conditional approval of Fremont Energy Center LLC's plan to construct a $260 million 540 MW natural gas-fired electric generation facility in Sandusky County. Fremont is a fully-owned subsidiary of California-based Calpine Corp. The facility would receive its gas from a connection with Dominion East Ohio Gas pipeline, and its electricity output would be delivered to a local grid. If approved, construction is expected to begin in May 2001, with commercial operation beginning in May 2003.

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