Natural gas customers could be paying more on their monthly bills in the coming year if a request for an additional surcharge by Dominion East Ohio is approved by the state public utilities commission.
In a letter received by Marietta officials last week, Robert Varley, Dominion's managing director for state and local affairs, noted the company has filed for an adjustment in the pipeline infrastructure replacement (PIR) recovery fee it charges customers.
"This is to recover costs for replacing old natural gas pipeline in our service areas," said Neil Durbin, senior communications specialist for Dominion East Ohio.
He said the company has invested $160 million in the PIR program aimed at replacing about 5,000 miles of Dominion East lines over a 25-year period.
"The current PIR charge is $2.80 on the typical residential bill," Durbin said. "If approved by the PUCO this would be an estimated $1.15 adjustment to that PIR fee."
Large volume commercial and industrial customers are currently billed $23.68 per month for the PIR charge. For those businesses the estimated rate increase would jump to $31.69 a month.
Proposed rate increase:
Dominion East Ohio is applying for an increase in the pipeline infrastructure replacement (PIR) fee on customers' natural gas bills.
If approved by the PUCO the current residential rate of $2.80 would increase to an estimated $3.95 per month.
The rate for large volume commercial and industrial customers would increase from $23.68 to an estimated $31.69 a month.
The rate for schools would increase from $107.94 to an estimated $145.21 per month.
The PUCO would have to analyze and approve Dominion East's request before the current rates could be changed, and that process is not expected to be completed until sometime in mid-2013.
Source: Dominion East Ohio
Schools pay $107.94 per month for the pipeline replacement cost now. But if the requested rate increase is approved, that figure would be hiked to $145.21 per month.
Frontier Local School District treasurer Frank Antill said electricity is usually the larger issue for the schools budget, but any additional cost has to be a concern.
"I have to take potential cost increases into account as there can be adjustments during the year," he said. "We try to build a cushion into the annual budget for those costs."
Marietta Councilman Mike McCauley, who chairs council's special utilities committee, said the PIR cost adjustment is not related to the city's natural gas aggregation program.
The program provides a set annual bulk rate for participating natural gas customers within the city limits.
"This (PIR) charge is on the gas transmission side of customers' bills. It does not impact our aggregation program," he said.
Tom Bellish, president of Buckeye Energy Inc., broker for the city's gas aggregation program, said those customers are paying $4.33 per mcf (1,000 cubic feet) of gas at this time.
"That rate is locked in through 2013, and is the lowest price I've ever seen for natural gas," he said. "But the PIR surcharge does not impact that rate. That's on the Dominion East side of the bill for all customers."
McCauley noted Dominion East's replacement of natural gas lines will help prevent disasters like the explosion that occurred along I-77 near Sissonville, W.Va., Tuesday.
The blast destroyed four houses and heavily damaged five others, as well as melted about 800 feet of guardrail and road surface in the north and southbound lanes of I-77.
Durbin said the 5,000 miles of gas lines being replaced are part of a 21,000-mile system of pipeline maintained by Dominion East Ohio.
He said any increase in the PIR charge would have to be approved by the PUCO.
In his letter to Marietta officials, Varley said the company notified the PUCO of its intention to file an application in February 2013 to amend the PIR charge to cover line replacement costs through the end of 2012.
"No charge will be implemented until the PUCO has analyzed and audited the schedules contained in the February filing, and approves charges based on its review," Varley wrote.
He said the PUCO process is not expected to be completed until the second quarter of 2013.