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Columbia Gas Files To Recover Investment In Replacing Aging Infrastructure

Published 14 April 2017

Columbia Gas of Maryland (Columbia Gas), a subsidiary of NiSource, filed a request with the Maryland Public Service Commission (PSC) to adjust its base rates for distribution service so it can continue to expedite the replacement of aging pipe as well as adopt pipeline safety upgrades.

"Our number one priority is maintaining the safety of our customers and the communities we serve," said Mike Huwar, Columbia Gas president. "We have made, and will continue to make, substantial capital investments in our system to update the safe and reliable system we currently operate. We believe this filing provides a number of tangible benefits to our customers."

Since 2007, Columbia Gas has invested more than $100 million to modernize and expand its distribution system in Maryland. Of that amount, approximately $65 million was dedicated to replacing more than 63 miles of aging bare steel and cast iron pipe. In 2017, Columbia Gas will invest approximately $20.5 million in Maryland, with nearly $16 million being invested to upgrade aging infrastructure.

"We are proud of our pipeline replacement program and our ability to continue to serve our valued customers safely and reliably, but our work doesn't stop there," said Columbia Gas Vice President and General Manager Mike Davidson. "We also remain committed to providing a positive customer experience through an educated and trained workforce focused on safely meeting or exceeding all federal and state requirements while operating our distribution system."

In today's filing, Columbia Gas is seeking an annual revenue increase of approximately $6.0 million.

"We are working more efficiently than ever, and we will continue to look for additional ways to make the most cost-effective decisions for our customers," said Huwar.

If the adjustment is approved by the PSC, the average total bill for a residential customer who purchases 70 therms of gas per month from Columbia Gas would increase from $84.24 to $98.17 (16.54 percent increase). The average total bill for a small commercial customer who purchases 240 therms of gas per month from Columbia Gas would increase from $284.31 to $322.29 (13.36 percent increase). The average total bill for an industrial customer who purchases 3,660 therms of gas per month from Columbia Gas would increase from $3,190.45 to $3,205.86 (0.48 percent increase).

Columbia Gas Director of Rates and Regulatory Affairs Adam Lanier noted, "The impact on the customer's bill associated with this filing is softened thanks to continued low, stable natural gas costs. On behalf of our customers, we work with suppliers to secure the best possible natural gas prices, while maintaining the reliability of gas supply during peak demand periods."

Gas costs generally represent about a quarter of a residential customer's total bill. Columbia Gas purchases its gas on the wholesale market and under Maryland law, passes these costs on to its customers without mark-up or profit. The gas cost portion of a residential customer's monthly bill is based entirely on their home's monthly gas consumption.

The process for a general rate proceeding before the PSC can take up to nine months and Columbia Gas expects that new rates would be effective at the end of 2017.

Source: Company Press Release