Columbia Gas customers to see bills increase

State regulators approved a rate increase for customers of Columbia Gas of Pennsylvania that will become effective on Dec. 16.

The average residential customer will see a rate increase of 4.5 percent, taking the average monthly bill from $91.63 to $95.74.

Columbia, a subsidiary of Indiana-based NiSource Inc., had asked for what would have amounted to a 9 percent increase on residential consumers when it filed its case in March. The lower rate represents a settlement with regulators, consumer and other groups.

Columbia Gas of Pennsylvania has 426,000 customers across 26 counties in the state.

As part of Columbia’s rate case, the Pennsylvania Public Utility Commission also approved the continuation of pilot program where the utility adjusts customer bills for impacts from unusual weather.

Since 2012, Columbia has had a “weather normalization adjustment” program that smooths out customer bills and the utility’s revenue stream by correcting for very warm or very cold weather.

It works like this: If the number of heating days varies by more than 3 percent from the average of the past 20 years, customers will either get a credit or an extra charge to level out the difference.

PUC Chairwoman Gladys Brown encouraged other utilities to follow suit with their own weather normalization plans. She said that with this mechanism, decoupling the portion of customers’ bill that pays for system maintenance and overhead from how

much gas they consume is a step in the right direction.

Traditionally, how much a utility earns from delivering gas to customers depends on how much gas is consumed. Some utilities and energy conservation advocates say this makes no sense because it discourages utilities from helping customers save energy — after all their revenue depends on it. Also, the cost of maintaining pipelines and facilities doesn’t vary materially depending on how much they’re used.

Pennsylvania passed legislation earlier this year encouraging alternative ratemaking mechanisms and clarifying the PUC’s authority over approving them.

Columbia, however, has been pitching alternative schemes for years and, with the exception of the weather program, to no avail.

The utility’s top choice, a levelized distribution charge, was first introduced in 2011. This would decouple what customers pay for the volume of gas they use (this would be the variable portion of the bill) from what they pay for the utility to run their distribution system (a fixed charge).

The PUC rejected the mechanism in Columbia’s rate cases in 2011, 2012 and again in 2015.