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 supply.
"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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