The Public Utilities Commission of Ohio (PUCO) Wednesday adopted a stipulation filed in Columbia Gas of Ohio’s gas cost recovery audit proceeding that would result in a $36.5 million credit to customers, a wholesale gas supply auction and the implementation of a demand-side management program.

“This agreement resolves the outstanding issues in Columbia’s gas cost recovery audit and provides benefits to the company’s customers,” PUCO Chairman Alan R. Schriber stated. “We are confident that the credit combined with the energy efficiency program and wholesale gas supply auction will provide long-term benefits to Columbia’s customers.”

Under the terms of the agreement, Columbia, the largest gas utility in Ohio, would credit $26.5 million to the CHOICE Program Sharing Account and would prepay its customers for $10 million of off-system sales and capacity release revenues anticipated to be earned by Columbia during the transition period established by the stipulation. The total of $36.5 million would be credited through customer bills. Each customer of Columbia would receive a credit of 24.16 cents/Mcf for 12 months beginning with February bills. The annual total credit would be about $21.00 for the average residential customer.

Columbia also agreed to procure natural gas supplies through a wholesale supply auction. Columbia intends to file an application with the PUCO by Feb. 1, 2009 with a projected auction implementation date of April 1, 2010.

In addition, the agreement requires Columbia to file a demand-side management application, cooperatively developed by the company, PUCO staff, the Ohio Consumers’ Counsel (OCC) and other stakeholders by July 1. The program would be in effect from 2009-2011 and would implement cost-effective energy efficiency programs for all residential and commercial customers. At the end of 2011, the program is expected to achieve a verified energy usage reduction at a level of 0.75-1% of Columbia’s total annual residential and commercial jurisdiction tariff sales, adjusted for weather.

In January 2005 PUCO opened the gas cost recovery proceeding and established financial audit periods. The management/performance audit report was filed in September 2006, and hearings began later that year. In December a joint stipulation and recommendation was filed by Columbia, PUCO staff, OCC, Ohio Farm Bureau Federation, the Ohio Hospital Association, Honda of America Manufacturing Inc., North Coast Gas Transmission LLC, Dominion Retail Inc. and MxEnergy Inc. to resolve all outstanding issues in the proceeding. The Ohio Marketers Group, Integrys Energy Services, Inc., the city of Toledo and the Lucas County, OH, commissioners also joined the stipulation after it was filed with the PUCO.

A copy of the PUCO opinion and order and the stipulation is available at www.PUCO.ohio.gov in the “Docketing Information System” under Case No. 04-221-GA-GCR.

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