Piedmont Natural Gas said Thursday it has reached a settlement in principle with the North Carolina attorney general’s office over the utility’s rate mechanism. North Carolina agreed to drop its appeal of the rate mechanism, and Piedmont agreed to share with its customers a portion of what is recovered through the mechanism, which could return up to $1.5 million a year to its customers through Oct. 31, 2008.
The Charlotte, NC-based utility’s Customer Utilization Tracker (CUT) was approved and adopted in a 2005 rate case before the North Carolina Utilities Commission (NCUC). It separated the collection of utility margin from customer volumes, which vary depending on prevailing weather conditions, appliance efficiencies and customer conservation practices.
“With this settlement, Piedmont’s interests are firmly aligned with those of our customers in terms of the importance, necessity and application of energy conservation measures,” Skains said. “Our customers will benefit from the more efficient use of natural gas in their homes and businesses. and Piedmont’s shareholders won’t be penalized for promoting conservation to its customers.”
The portion of funds to be shared with customers would be applied equally to the development of new conservation programs by Piedmont in consultation with the NCUC Public Staff and the attorney general’s office and to the reduction of rate increases associated with the CUT mechanism.
Piedmont distributes natural gas to 990,000 residential, commercial and industrial utility customers in North Carolina, South Carolina and Tennessee, including 61,000 customers served by municipalities that are wholesale customers.
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