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Ohio Gas Company's application to increase distribution rates

Ohio Gas Company filed an application with the Public Utilities Commission of Ohio (PUCO) on May 31, 2017 to increase its rates for natural gas distribution service.  The last time that Ohio Gas Company was authorized to increase its distribution rates for delivery of natural gas service was in 1985.

What are natural gas distribution rates?

Natural gas bills are comprised of two main parts – cost of the natural gas and the cost of distributing the natural gas to homes. 

The distribution rate pays for all the things that Ohio Gas Company must do to deliver natural gas to its customers, including installing and maintaining natural gas pipelines, reading natural gas meters, processing bills and taking customer service calls.

The cost of natural gas, which approximately makes up 70 percent of customers bills, is not a part of this rate case.  This cost is passed through to customers on a dollar-for-dollar basis with no mark-up or profit to the utility company. 

What is the PUCO’s role in setting distribution rates?

According to Ohio law, a public utility is allowed to recover its operating expenses, plus a reasonable return on its infrastructure investments from customers. When a utility requests a rate increase from the PUCO, several steps are taken to review the company’s financial condition and ensure that the company is fulfilling its obligations to customers.

When evaluating proposed rates, the PUCO staff looks at whether the proposed rates will provide the company with adequate operating revenue according to Ohio law. In general, the cost of providing service to customers includes operating expenses (i.e. labor, supplies, maintenance of infrastructure and equipment, depreciation expense and taxes) and a return on the company’s infrastructure investment, which are used to calculate the company’s revenue requirement. The revenue requirement is the amount of money a company is allowed to collect from its customers during a given year.

What did Ohio Gas Company request in its application?

Ohio Gas Company requested an increase in total annual revenues of $3,237,346. This would increase the average residential customer monthly bill from its current level of $84.82 to $90.28. 

If a customer consumed 100 hundred cubic feet (Ccf) of natural gas, the percentage increase in the customer’s total bill would be 6.44 percent over current charges.

Ohio Gas Company also proposed a new rider that would collect expenses associated with the Ohio gross receipts tax and increase certain one-time charges, including charges for reconnection; field collection of bills; checks returned for insufficient funds; new charges for meter relocations; installation of excess flow valves; and investigation fees associated with tampering and fraud.

What did the PUCO staff recommend?

On November 22, 2017, the PUCO staff issued a report recommending a distribution rate increase in the range of $2,441,967 to $2,873,410.  This would increase the average residential customer’s monthly total bill from about $84.82 to $89.29 or 5.27 percent over current charges. The PUCO staff report advises the PUCO commissioners of the staff’s recommendations. However, the Commission is not bound by the staff recommendations and may implement some of the staff’s suggestions and reject others.

How can I make my voice heard?

A local public hearing is scheduled to allow the public to express their views and provide testimony regarding the company’s application.  The following hearing has been scheduled;

Wednesday, January 3, 2018 at 6:00 p.m.
Defiance City Hall, Council Chambers
631 Perry Street
Defiance, Ohio 43512

The evidentiary hearing in this proceeding will begin on:

Thursday, January 18, 2018 at 10:00 a.m.
Commission Offices, Hearing Room 11-A
180 E. Broad Street
Columbus, Ohio 43215

To submit comments online:

  1. Visit the Docketing Information Systems page.
  2. Enter the case number 17-1139-GA-AIR in the “DIS Quick Search” field at the right side of the page.
  3. The results of your search will be returned, allowing you to access the contents of the case docket and submit comments on line by clicking “File a Public Comment”.

Additionally, Ohio Gas Company’s customers may write to the PUCO by mail at 180 East Broad Street, Columbus, Ohio 43215. Comments should include case number 17-1139-GA-AIR.

How can I learn more about the rate case?

Ohio Gas Company’s application and the case record can be viewed online by visiting the case docket for 17-1139-GA-AIR.

If you would like to know more about the PUCO or have utility-related questions or concerns, contact the PUCO at (800) 686-PUCO (7826) or visit us online at www.PUCO.ohio.gov.