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PSC Approves Interim Rate Decrease for Columbia Gas Reduction reflects federal tax changes

Apr 30, 2018

The Kentucky Public Service Commission (PSC) has approved an interim rate decrease proposed by Columbia Gas of Kentucky to reflect the federal corporate income tax reduction which took effect this year. As a result, the amount Columbia Gas charges to deliver gas will decrease for all customer classes. The reduction for residential customers is 22 cents per 1,000 cubic feet (mcf) of natural gas used, effective May 1, 2018.

Because natural gas usage often fluctuates dramatically with the time of year, the effect on residential customer bills will vary. A residential customer who heats with natural gas and uses 10 mcf per month in the winter will see a reduction of $2.20 in the monthly bill as a result of the interim rate reduction.

The rate reduction applies only to Columbia’s base rate, which covers the utility’s cost of operating and maintaining its system, as well as any profit margin. The commodity cost of the gas itself, which is adjusted quarterly to reflect market prices, is determined separately and is passed through to consumers on a dollar-for-dollar basis by Columbia Gas, with no markup. Because there is no additional profit for the utility, the commodity cost is not affected by Columbia’s tax rate.

Today’s order and other records in the case are available on the PSC website, psc.ky.gov. The case number is 2018-00041.