OCC, NOPEC Join Columbia Gas of Ohio, Duke in Protest Against Transmission Company
By Rachel Duthie on August 18, 2020
More than 1.4 million households and businesses in 66 Ohio counties are facing a nearly 80 percent rate hike if the Federal Energy Regulatory Commission (FERC) agrees Columbia Gas Transmission's service costs have nearly quadrupled since 1995. The Ohio Consumers' Counsel (OCC) and Northeast Ohio Public Energy Council (NOPEC) say that would suggest an annual cost increase of 15.5 percent, versus average yearly inflation at a fraction of that, and provide Columbia an "outrageous profit" of 16.1 percent return on equity.
OCC and NOPEC filed their protest with FERC last week on the same day a long list of Columbia Gas Transmission customers, including Columbia Gas of Ohio and other Nisource distribution companies in Kentucky, Maryland, Pennsylvania and Virginia; Duke Energy Ohio and Duke Energy Kentucky; and natural gas distribution companies in other states filed a separate complaint against the transmission company, which Nisource spun off as a separate, publicly-traded entity in 2015.
The consumers' counsel and NOPEC, nearly a third of whose customers are served by Columbia Gas of Ohio, attack the company's claim that its transmission rates have fallen short of capital investments over the past 25 years, during which its customer rate base has grown from $1.5 billion to almost $11 billion.
"Had the pipeline been under-recovering its costs during this period, it could have and would have requested an increase in rates. That fact that it did not is most likely related to the numerous expansions of its system undertaken over this period, resulting in an increase in sales and throughput that has offset most, if not all, increases in costs," argues OCC and NOPEC. "These facts indicate that the pipeline has been recovering its costs, and indeed, as has been the case for many pipelines over that period, may well have been over-recovering its costs during a good part of this period."
They also object to Columbia Gas Transmission's attempt to recoup its costs for "airplanes, office buildings, furniture, office equipment and software" through future rates.
OCC and NOPEC do acknowledge the company's $2 billion investment in "upgrades and expansions" since 1995, however, and its $3 billion modernization program projected for the next seven years.
They offer their complaint against the backdrop of the COVID-19 economy and an Ohio unemployment rate hitting 17.6 percent in April.
"Columbia's proposal comes in the midst of one of the worse financial crises for people in 100 years...," say OCC and NOPEC. "Although that [unemployment] rate dropped in June to 10.9 percent, it is still double the normal rate of unemployment in the state, indicating hard times for many Ohio families and households throughout the Columbia region."
They are pressing FERC for evidentiary hearings, discovery and/or settlement discussions into Columbia Gas Transmission's rate request.
"Columbia's filing, if approved without downward adjustments, would result in Ohio retail customers paying excessive, unjust and unreasonable rates for natural gas transmission services," OCC and NOPEC say.
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