Consumer Advocate: Columbia Gas 18% rate hike request seeks 'large profit margin'

Columbia Gas of Pennsylvania’s 436,000 customers counties could be hit with a nearly 18% rate hike next year if the state agency overseeing utilities approves the requested increase.

Columbia Gas said it is seeking to generate $100.4 million annually to pay for replacing and upgrading aging underground pipelines. The gas company said it intends to invest $319 million this year in Pennsylvania, with more than $240 million dedicated to upgrading aging underground infrastructure. It has not sought such a rate hike in two years, said Russell Bedell, Columbia Gas spokesman.

The state’s Office of Consumer Advocate, however, has opposed the request to the Pennsylvania Public Utilities Commission on the grounds that “it may be unjust and unreasonable,” said Tanya McCloskey, acting Consumer Advocate.

After reviewing the company’s request to charge customers an extra $100.4 million a year to pay for its ongoing projects to replace gas lines, McCloskey said, “they are asking for a large profit margin.”

A rate hike that high could hurt customers’ ability to pay their natural gas bill after an economic downturn because of covid-19, McCloskey said.

Under Columbia’s proposal, the PUC said the total bill for a typical residential heating customer using 70 therms of gas per month would increase from $87 to $103, or by about 17.8%.

Columbia Gas defended the rate hike request, saying it was “fair and reasonable” given its investment in the distribution system. Even with the rate hike, Columbia Gas said the average residential bill, when adjusted for inflation, would be 28% lower than it was 10 years ago.

Columbia Gass has customers in 26 counties.

Hearings set for July 8

The public will get their chance to voice their opinion on the proposed rate hike during two public hearings the PUC intends to hold at 1 and 6 p.m. July 8.

As part of the normal process, the PUC is conducting a full investigation into the case. An administrative law judge will make a recommendation to the commission after the evidence and testimony is received. The commission will review the case and make its final decision, which likely will occur in January or February, McCloskey said.

Those interested in testifying must contact the Consumer Advocate before 10 a.m. July 7, to provide your name, phone number and the topic of your testimony.

The Consumer Advocate’s office can be reached toll-free at 800-684-6560.