Vectren applies to raise natural gas rates

Pipe laid out in Central Indiana farmland on its way to Ohio in 2008. The $5 billion project was built to move natural gas from the Rocky Mountains to Ohio. Jim Noelker/Dayton Daily News

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Pipe laid out in Central Indiana farmland on its way to Ohio in 2008. The $5 billion project was built to move natural gas from the Rocky Mountains to Ohio. Jim Noelker/Dayton Daily News

Vectren Energy Delivery of Ohio is applying to the state for an increase in rates, the company said Wednesday.

Vectren submitted a pre-filing notice Wednesday with the Public Utilities Commission of Ohio (PUCO) indicating it seeks to raise charges for its gas distribution business in its 17-county West Central Ohio service.

The average residential customer would pay about $7 a month more if state regulators approve the change, the company said. In 2017, the average Vectren residential customer paid about $55 to $60 a month for Vectren natural gas service, although most of those costs are felt in the winter.

Still, even with the increase, Vectren said average residential natural gas bills are projected to be about 15 percent lower than the bills customers saw in the late 2000s, when natural gas prices were lodged at record levels.

“The request to increase base rates for its gas delivery charges is the first Vectren has filed in more than a decade and covers the ongoing cost of operating, maintaining and expanding the approximately 5,600-mile pipeline system used to serve its 318,000 customers,” the company said in an announcement.

Vectren said it is already taking into account recent corporate tax cuts in seeking this rate increase.

In January, the PUCO asked Ohio electric utilities to consider lowering their rates after the federal government cut corporate income taxes from 35 to 21 percent.

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Ohio utilities responded by asking for clarification on the request.

“Because energy bills include the cost of income taxes, those reductions will be considered in this rate review process,” Vectren said Wednesday.

A customer’s natural gas bill is composed of infrastructure as well as supply charges.

“It’s to help pay for improved infrastructure,” Colleen Ryan, Vectren Energy Delivery of Ohio president, said of the proposed increase in a phone interview.

The PUCO considers rate applications in a process that gives intervening parties and the public a chance to comment. There will also be public hearings on the matter across Vectren’s service area, a PUCO spokesman said.

The process could take some nine months before the PUCO makes a decision on the application.

The spokesman confirmed that the PUCO received the application today.

Since its late rate adjustment, Vectren said it has invested some $700 million into its Miami Valley network of gas pipelines, regulator stations and metering systems.

“The primary driver of this filing is our infrastructure work needed to continue safe, dependable energy delivery to existing customers and reach new customers,” Ryan said in Vectren’s statement.

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“We will also request an adjustment in our annual operating budget to account for the increase in labor costs we’ve experienced in executing compliance-related activities associated with federal pipeline safety regulations,” she added.

Vectren said in the last decade it has:

• Built “robust” pipeline integrity programs to test, upgrade and, in some cases, move high-pressure, large-diameter transmission pipelines;

• Expanded gas infrastructure;

• Replaced its distribution pipelines with “durable plastic” to improve system performance;

• Installed automated meter reading technology on all meters;

• Moved indoor meters outside, which includes the installation of new service lines, to improve access and safety.

Vectren Energy Delivery of Ohio delivers natural gas to about 318,000 customers in all or portions of Auglaize, Butler, Champaign, Clark, Clinton, Darke, Fayette, Greene, Highland, Logan, Madison, Miami, Montgomery, Pickaway, Preble, Shelby and Warren counties.

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