The New York State Public Service Commission (PSC) is taking comments on a settlement in National Fuel Gas Distribution Corp.’s (NFG) pending rate case that will reduce natural gas customer bills over the next two years and fix rates thereafter. Although base rates actually will increase under the plan, a rate reduction will be achieved by passing through the benefits of a tax change and previous tax overcollections, the PSC said in a statement.

NFG sought a $60.9 million annual rate increase last August. The proposed delivery rate increase, when combined with the cost of supply, would have resulted in an average increase on residential customer bills of 5.6%.

However, on April 15, following negotiations with the New York State Consumer Protection Board, a group of large industrial customers, several energy marketers and a PSC staff team, the utility company filed a revised rate plan. While the proposal provides for a base rate increase of $15 million, as well as the elimination of $6 million in bill credits currently flowing to ratepayers, there are other provisions that would result in a net decrease in ratepayer costs.

Specifically, the proposal reflects the change in taxes that occurred when the gross receipts tax was reduced and a state income tax was imposed. More of these taxes are now included in base rates instead of being collected through a separate charge on the bill. The net effect of this change is to reduce amounts that would otherwise be paid by ratepayers.

The proposal also provides for two years of credits to ratepayers to return prior overcollections of state income taxes. Over the two years covered by the proposal, the net effect is an overall annual decrease in amounts paid by ratepayers of $15 million.

However, while all residential and general service customers will experience decreases, large transportation customers will see increases in gas transportation costs ranging from 1.5% to 10%, depending on service classification and usage. The total bill impacts when commodity costs are included are generally less than 1%. The proposal also creates an opportunity for large customers to mitigate the impact of the increase by switching to daily metered service.

Comments on the proposal must be submitted by May 25. They can be made via the web at https://www.dps.state.ny.us.

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