Office of the Ohio Consumers' Counsel

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PUCO approves rate hikes to Columbia Gas ratepayers

Customer charge to increase; Energy conservation programs enhanced

COLUMBUS, Ohio — December 3, 2008 — A higher flat-rate charge and a lower usage-based fee will greet customers of Columbia Gas of Ohio in the new year after a ruling today by the Public Utilities Commission of Ohio (PUCO). The decision follows an agreement reached on Oct. 24 among the Office of the Ohio Consumers’ Counsel (OCC), the PUCO staff, Columbia and other parties which lowered the utility’s proposed $87.8 million annual revenue increase by nearly half to $47.1 million. While the settlement resolved most issues, the OCC still contested Columbia’s proposed rate design, which will lead to sharp increases in its flat-rate charge.

The PUCO order will result in a two-year phased in rate hike to the flat-rate customer charge. The monthly customer charge will increase from $6.50 to $12.16 in the first year. The customer charge will again increase to $17.81 per month the following year. The PUCO staff had recommended doubling the customer charge to $13 per month with another $6.50 increase to $19.50 per month the following year. The increases will be accompanied by a corresponding reduction in the usage-based portion of the distribution charge, to $0.7911 per thousand cubic feet of natural gas (Mcf) for the first year. The usage-based portion will be eliminated the second year.

The reaction of the OCC to the PUCO’s order was mixed. “We are pleased that the PUCO adopted the agreement that had many positive features that we negotiated for,” Consumers’ Counsel Janine Migden-Ostrander said. “However, with respect to the design of the rates,” she added, “we are disappointed that the PUCO decided to load all of Columbia’s delivery charges into one fixed rate that everyone must pay regardless of the size of their home. We believe that this will have a harmful effect on low-income customers, especially during difficult economic times.”

The rates affected by the PUCO’s decision are the base distribution charges that make up approximately 20 percent of a customer’s bill. The cost of the natural gas itself was not at issue in this case.

As part of the agreement signed in October, Columbia will fund a comprehensive study, which will include an evaluation of the effect of the new rate design on customers at all income levels, as well as a study of its impact on energy efficiency efforts.

The parties also agreed to measures that will benefit residential customers by providing conservation incentives as well as assistance to low-income customers struggling to pay their utility bills. In addition, several customer service improvements were approved by the PUCO as a result of the agreement, which included the following:

  • Recovery costs for Columbia’s Infrastructure Replacement Program were capped at five years. Customers will be charged a monthly fee of $1.10, which would increase by $1.10 the next year and by $1 each of the following three years to a maximum of $5.20 per month in 2013. The costs will cover the replacement of potentially faulty gas risers (approved by the PUCO in April), Columbia’s replacement of cast iron, wrought iron, unprotected coated steel and bare steel pipes in its distribution system, and the installation of automatic meter reading devices.

  • $1.85 million will be provided over the next five heating seasons (2008-09 through 2012- 13) to assist low income customers in the payment of bills when all other available funds have been exhausted.

  • $1.15 million will be provided over the next four years to develop a pilot program to assist 6,000 low-income customers with their bills that are not eligible for the statewide Percentage of Income Payment Program.

  • Three new programs will be established, and an existing program enhanced, to promote conservation and energy efficiency, as agreed to by the parties and approved by the PUCO in July.

  • New customers will be allowed to pay their security deposits in three monthly installments and information will be provided to help existing customers distinguish between authorized and unauthorized payment agents.

Columbia is the largest natural gas utility in the state serving approximately 1.4 million customers in 60 of Ohio’s 88 counties.

About the Office of the Ohio Consumers' Counsel

The Office of the Ohio Consumers' Counsel (OCC), the residential utility consumer advocate, represents the interests of 4.5 million households in proceedings before state and federal regulators and in the courts. The state agency also educates consumers about electric, natural gas, telephone and water issues. For more information, please visit the OCC website at
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