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Vectren Energy Delivery of Ohio's application to increase distribution rates

Vectren Energy Delivery of Ohio filed an application with the Public Utilities Commission of Ohio (PUCO) on March 30, 2018, in Case Nos. 18-0298-GA-AIR and 18-0299-GA-ALT, to increase its rates for natural gas distribution service and to implement an alternative rate plan.  On April 13, 2018, in Case No. 18-0049-GA-ALT, Vectren filed a separate application for an alternative rate plan.  The PUCO consolidated the three cases on May 24, 2018.

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 Vectren 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 on to customers through Vectren’s standard choice offer rate or a gas marketer’s rate.  Vectren makes no profit on this part of the bill. 

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 Vectren Energy Delivery of Ohio request in its application?

Vectren Energy Delivery of Ohio requested an increase of $34.0 million.  This would increase the monthly distribution rates, excluding the cost of natural gas, for a residential customer using 100 Ccf from its current level of $32.47 to $39.63 a 22% increase or $7.16 per month. 

Vectren Energy Delivery of Ohio also is proposing modifications to its Distribution Replacement Rider (DRR), Energy Efficiency Funding Rider (EEFR), Capital Expenditure Program (CEP) and Distribution Accelerated Risk Reduction Program (DARR).  Additionally, Vectren is proposing to implement a Multi-Family Housing Pilot Program, expand the Straight Fixed Variable (SFV) rate design to include small non-residential customers, and to propose an Energy Conversion Factor.

What did the PUCO staff recommend?

On October 1, 2018, the PUCO staff issued a report recommending a distribution rate increase of $12.1 million to $16.2 million. Using the mid-point of this range, this would increase the monthly distribution rates, excluding the cost of natural gas, for a residential customer using 100 Ccf from its current level of $32.47 to $35.05, or $2.58 over current charges. The staff report also recommends continuing the distribution replacement program for an additional five years. 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 has scheduled local public hearings to allow the public to express their views and provide testimony regarding the company’s application.  The following hearings have been scheduled: 

Thursday, November 15, 2018 at 6:00 p.m.
Dayton Municipal Building
Council Chambers
101 W. Third St.
Third & Ludlow, Second Floor
Dayton, Ohio 45401

Monday, November 26, 2018 from 6:00 p.m.
Fayette Commission on Aging
1179 S. Elm Street
Washington Court House, Ohio 43160

Wednesday, November 28, 2018 from 6:00 p.m.
Sidney Municipal Building
Council Chambers
201 W. Poplar Street
Sidney, Ohio 45365

The evidentiary hearing in this proceeding will begin on:

Tuesday, December 4, 2018 at 10:00a.m.

PUCO Offices, Hearing Room 11-C
180 E. Broad Street
Columbus, Ohio 43215

Consumers may also submit comments online at www.PUCO.ohio.gov or by mail addressed to the Public Utilities Commission of Ohio, 180 E. Broad St., Columbus, OH 43215. Correspondence should include the case number 18-0298-GA-AIR.

To submit comments online:
  1. Visit the Docketing Information System page.
  2. Enter the case number 18-0298-GA-AIR in the “Case Lookup” 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 online by clicking “File a Public Comment”.

 

How can I learn more about the rate case?

Vectren’s application and the case record can be viewed online by visiting the case docket for 18-0298-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.