2024 Tariff Notice

As part of its thorough review of this rate adjustment request, the Kentucky Public Service Commission will schedule opportunities for public comment. A notice of those opportunities will be made public once the dates are set. In the meantime, customers may provide input via the Kentucky Public Service Commission website – psc.ky.gov – referencing Case No. 2024-00092.  

Yes, our system is safe. However, we must be a prudent operator and address the systemic replacement of aging assets with new materials, additional protections and employee training to ensure continued safe and reliable service. We utilize standard industry best practices to inspect and assess our systems, and we also evaluate new technologies to improve upon those best practices. Realizing that one of the greatest threats to our systems is third-party damage, we work year-round to educate the public and contractors about how to avoid damaging underground pipelines by calling 811 before they dig.  

In 2009, CKY estimated that of its more than 2,600 miles of gas distribution pipelines in Kentucky, it had approximately 525 miles of bare and ineffectively coated steel and cast-iron main lines and the associated service lines within its infrastructure. The industry has used different types of pipes over the last century, including cast iron, wrought iron and bare steel. While these unprotected – or uncoated – materials were the preferred choice at the time they were installed, they have been found to be vulnerable to corrosion and ground movement from weather-related stresses, resulting in leakage over long periods of time. 

Since the program began in 2009, Columbia has replaced all of its known cast iron pipes and is now working to replace bare steel and wrought iron pipes.  

A customer may purchase the commodity from a third-party supplier as a participant in the Customer CHOICE Program. As a participant, the customer may choose from a number of approved third-party natural gas suppliers. A list of those suppliers and their current prices can be found at https://psc.ky.gov/Home/ColumbiaChoice. Columbia Gas would deliver the natural gas purchased from a third-party supplier and send the monthly bill to the customer. 

The requested increase in base delivery rates would translate to an increase of about $7.28 on an average residential customer’s monthly bill and an increase of about $28.73 on an average commercial customer’s monthly bill.    

The customer bill shows two basic types of charges on a natural gas bill: the Gas Supply Cost (or commodity charges) and Delivery Charges. 

The Gas Supply Cost is the actual cost of the natural gas commodity. This commodity cost is passed along to customers without mark-up or profit and can represent approximately 35% of a customer’s monthly bill. On a quarterly basis, Columbia adjusts its gas supply cost to reflect current market prices and actual costs. We have seen commodity costs fluctuate up and down over the years. Columbia’s current gas supply cost is $2.9536 per Mcf. The previous quarter gas supply cost was $5.0897 per Mcf. The next quarterly adjustment will be in June 2024.  

Delivery Charges are the base rates that Columbia proposes to change with the rate case. On the customer bill, they appear as two parts – the fixed Customer Charge and the volumetric Delivery Charge. These rates recover the costs associated with making natural gas available to customers, including the essential investments in the people, equipment and materials needed to provide safe and reliable gas service around the clock every day of the year. Columbia Gas is proposing to increase the fixed customer charge and the volumetric delivery charge.  

Columbia is proposing to increase the fixed customer charge from $19.75 to $27 for residential customers and from $83.71 to $110 for commercial customers.  

The volumetric delivery charge is proposed to increase from $5.2528 per Mcf of natural gas consumed to $5.7874 per Mcf for residential customers. The proposed change in the volumetric delivery charge for commercial customers is shown in the table below based on consumption: