Office of the Attorney General
Attorney General Conway Announces that Columbia Gas Agrees to Cut Requested Rate Increase by More than $5 Million
Attorney General Jack Conway today announced a settlement agreement with Columbia Gas of Kentucky, Inc., which reduces the company’s original demand for a rate hike by almost 50 percent. The agreement limits Columbia to a general increase of $6.125 million, a decrease of $5.44 million from its original request of approximately $11.57 million.
In addition to the amount of settlement, Columbia has agreed to withdraw a request for a rate mechanism that would have resulted in huge monthly customer charges regardless of the amount of natural gas a customer would have used. In a two-year phased approach, the company wanted to increase the monthly charge from $9.30 to $26.53, before even adding the costs for delivering the gas.
"Ratepayers should be encouraged to conserve gas and thus reduce their bills," said General Conway. "Allowing a utility to eliminate its delivery charge and to roll those costs into the fixed monthly bill would guarantee the company’s profit, while creating a roadblock to customers who want to conserve and lower their bills. Obviously this proposal was unacceptable."
Also as part of the agreement, Columbia will implement a demand side management program. This is designed to help people conserve, by way of increasing their energy efficiency by education and home weatherization assistance.
"Under this agreement, Columbia’s customers will experience a much smaller increase in their natural gas rates," Attorney General Conway commented. "I will continue to closely examine all utility rate increases to protect consumers from overcharging."
The American Association of Retired Persons (AARP) also intervened on behalf of ratepayers in this case and believes the proposed settlement will help protect consumers, particularly seniors on fixed incomes, from seeing significant increases on their bills.
"Seniors would have been among the hardest hit under Columbia's proposal. The settlement is a far better outcome for seniors, low and fixed-income households who typically use less energy than average. Further, struggling customers who receive energy assistance won't incur late fees or higher reconnection costs," said AARP Kentucky's Cathy Allgood Murphy, Associate State Director for Advocacy. AARP, who was represented in the case by Tom FitzGerald of the Kentucky Resources Council, praised the Attorney General's staff for their leadership in protecting consumers through the settlement.
The Public Service Commission, which must approve the settlement, will hold a hearing on the matter on September 16, 2009 at 10 am.
Columbia serves more than 91,000 customers in 33 counties.
Since taking office, Attorney General Conway has saved ratepayers more than $95 million in proposed rate increases.