Suburban Natural Gas Company's application to increase distribution rates
Suburban Natural Gas (Suburban) filed an application with the Public Utilities Commission of Ohio (PUCO) on August 31, 2018 to increase its rates for natural gas distribution service.
What are natural gas distribution rates?
Natural gas bills are comprised of two main parts – the cost of the natural gas and the cost of distributing the natural gas to homes.
The distribution rate pays for all the things that Suburban 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 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. 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 Suburban request in its application?
Suburban requested an increase of annual revenues of approximately $3.4 million. This would increase the monthly fixed base distribution rate for residential customers from its current level of $29.42 to $41.86, for an increase of $12.44.
Suburban is also proposing modifications to its general service tariff, including increasing the reconnection charge.
What did the PUCO staff recommend?
On February 6, 2019, the PUCO staff issued a report recommending a revenue increase of $764,000 to $1.1 million. This represents an increase of 4.10 percent to 5.84 percent. This would increase the monthly fixed base distribution rate for residential customers from its current level of $29.42 to $33.88, for an increase of $4.46. Staff also recommended a rate of return in the range of 6.72 percent to 7.72 percent. 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?
The PUCO is holding a public hearing:
April 18, 2019, 6 p.m.
Delaware County District Library
84 E. Winter St.
Delaware, Ohio 43015
Consumers may also submit comments online at or by mail addressed to the Public Utilities Commission of Ohio, 180 E. Broad St., Columbus, OH 43215. Correspondence should include the case number 18-1205-GA-AIR.
To submit comments online:
- Visit the Docketing Information Systems page.
- Enter the case number 18-1205-GA-AIR in the “Case Lookup” field at the right side of the page.
- 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, Suburban customers may write to the PUCO by mail at 180 East Broad Street, Columbus, Ohio 43215. Comments should include case number 18-1205-GA-AIR.
How can I learn more about the rate case?
Suburban’s application and the case record can be viewed online by visiting the case docket for 18-1205-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.