Regulatory commission recommends smaller natural gas rate increase from Vectren

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Courtesy: Vectren

INDIANA (WEHT) The Indiana Office of Utility Consumer Counselor has reviewed the request from CenterPoint to raise natural gas rates, and is recommending a substantial reduction to that requested increase. Vectren South is requesting the increase due to higher operating and maintenance costs, along with infrastructure investments.

Vectren South’s request would raise annual revenues by $28.5 million, but the OUCC’s analysis shows that an increase of $14.3 million is justified. Vectren, owned by CenterPoint, filed a petition this past October to recover costs for a pipeline modernization plan. 

Some of the recommendation from OUCC include:

  • Reducing the monthly fixed charges on a residential natural gas bill from $25.10 to $16.50. This numbers comes from two monthly fixed charges that do not vary among customers:
    – A flat, monthly residential natural gas customer service charge of $11.00. OUCC recommendations would set the charge at $16.50.
    – A fixed, monthly $14.10 charge for infrastructure and pipeline safety mandates.
    – Vectren South’s request would have replaced both those charges with $35 monthly customer service charge. The OUCC is recommending $14.00 infrastructure charge reset to $0, and the customer service charge be increased.
  • Decreasing the natural gas utility’s authorized return on equity to 9.2 percent, which is consistent with authorized returns for similar utilities throughout the US in recent years.
  • Reducing numerous line items from the utility’s proposed amounts, including depreciation expense and operating and maintenance expenses.
  • Requiring additional details and transparency on customer bills, including line items on specific charges.

Base distribution rates comprise approximately 60 percent of a typical Vectren South residential bill. They cover “non-gas” costs such as operating and maintenance expenses and capital infrastructure improvements. The remaining 40 percent of a typical monthly bill pays for the natural gas itself, which the utility recovers on a dollar-for-dollar basis subject to OUCC review and IURC approval every three months.

Rebuttal testimony from Vectren South is due on Mar. 19, with an IURC evidentiary hearing scheduled to start on Apr. 12. A final Commission order is expected this summer.

(This story was originally published on February 19, 2021)

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