Columbia Gas files for new rates
5/1/2009 4:00:00 PM
LEXINGTON, Ky. – May 1, 2009 – Columbia Gas of Kentucky today filed a request with the Kentucky Public Service Commission to change its base delivery rates. The Company’s proposal includes benefits to customers, including continuation of its infrastructure improvement program and the implementation of an energy efficiency program.
Columbia also filed its quarterly Gas Cost Adjustment reflecting a 21.89% decrease in the cost of the gas commodity from $10.1224 to $7.9067 per Mcf (thousand cubic feet). The commodity cost – or the cost of the natural gas itself on which the company does not earn a profit – accounts for approximately 70 percent of an average residential customer’s monthly bill. If approved, the new price of natural gas would go into effect in June.
Last year, Columbia began an infrastructure improvement program to replace aging gas lines and enhance the overall safety and reliability of its gas distribution system over a 30-year period. Ultimately, Columbia expects to replace approximately 525 miles of pipe and associated service lines throughout its service area in Central and Eastern Kentucky. Through its current proposal, Columbia is seeking recovery for the almost $11 million invested in 2008 in this infrastructure as well as a mechanism to recover future investments in the program.
Columbia is also seeking to develop a residential energy efficiency program to offer customers help in reducing their gas usage and lower the gas cost portion of their bills.
“Just like other industries, our nation’s energy delivery system is experiencing many challenges today,” said Herbert A. Miller, Jr., president of Columbia Gas of Kentucky. “While we continually work to provide our customers with safe, reliable delivery of clean-burning natural gas and excellent customer service, it is important that we encourage the responsible use and conservation of our nation’s energy supplies. This type of energy efficiency program is an important step in that effort.”
To fund these programs and to generate revenue needed to maintain and operate its over 2,500-mile pipeline system, Columbia has requested an overall increase in revenues of approximately $11.566 million, or 7.03%. The requested rates would mean an increase in the average residential customer monthly bill of approximately $6.73 and would be effective only after the review and decision of the Kentucky Public Service Commission. Columbia is also proposing a two-year shift away from volumetric delivery rates to a flat monthly fee. Delivery rates account for only approximately 30 percent of a customer’s monthly bill.
Columbia Gas of Kentucky, headquartered in Lexington, is one of the nine energy distribution companies of NiSource Inc. (NYSE: NI), a Fortune 500 company engaged in natural gas transmission, storage and distribution, as well as electric generation, transmission and distribution. Columbia Gas of Kentucky serves approximately 140,000 customers in 31 Kentucky counties. NiSource operating companies deliver energy to 3.8 million customers located within the high-demand energy corridor stretching from the Gulf Coast through the Midwest to New England. More information about Columbia Gas of Kentucky is available at www.columbiagasky.com. More information about NiSource and its other subsidiaries is available at www.nisource.com.
Columbia Gas of Kentucky News