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Columbia Gas of Kentucky Files to Bump up Rates

June 2, 2016 By Cheryl Kaften

Columbia Gas of Kentucky, a subsidiary of NiSource that serves 135,000 customers statewide, filed on May 27 (Case No. 2016-00166) with the Kentucky Public Service Commission (PSC) for a Gas Cost Adjustment (GCA) – the company’s first such request since 2013.

Columbia is requesting an overall increase in revenues of $25.4 million – which would bump up the average residential customer’s monthly bill by about $11.35 and the average commercial customer’s invoice by $37.32.

Columbia said its filing would “recover investments and other costs associated with the company’s ongoing proactive initiatives to improve the overall safety and reliability of its natural gas distribution system.”

“Safety is the top priority … and is the focal point of this request,” company President Herbert A. Miller, Jr. commented, adding, “Our customers and our communities rely on the safety and reliability of our system and the well-trained staff that stands ready to serve them 24 hours a day, seven days a week.”

Among the specific reasons for the rate hike are the following:

  • In 2008, Columbia initiated an Accelerated Main Replacement Program (AMRP) as a proactive approach to replace aging infrastructure. Since then, the company has invested about $92 million and replaced approximately 108 miles or 570,240 feet of aging main lines and associated service lines. Costs associated with this program have appeared as a line item on customer bills, which would be rolled up into the base rates as a part of this request. The AMRP line item would decrease to zero.
  • Columbia’srequest also includes funds for a new local training center that is designed to provide employees with enhanced training and operator qualification programs. Technology advances would also be implemented for location and inspection of pipelines as well as emergency notification and response.
  • In addition to continued system safety and reliability, customers would benefit from an improved online experience driven by technology advances, including enhancements to the company’s online bill payment process.

The company’s Gas Supply Cost, which can represent as much as 50 percent of the customer’s monthly bill, remains at its lowest level in over 20 years, according to Columbia. “Historically low and sustained natural gas commodity prices have helped keep customer bills low,” Miller said. “With these proposed changes, a residential customer’s average monthly bill will still be almost $25 less than in 2008.”

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