[V]ermont’s sole natural gas provider has filed for a 2.7 percent rate decrease for next winter.
The state’s Public Utility Commission — the three-member quasi-judicial body that regulates the states utilities — still has to approve the rate request Vermont Gas made last Friday, which would go into effect for one year starting Nov. 1.
“We are pleased to propose another significant rate reduction for our customers,” said Don Rendall, president and CEO of Vermont Gas, in a statement Friday. “We know the cost of living can be a significant challenge for many Vermonters.”
If approved, the new rates would mean the average Vermont Gas customer would pay $30 less on heating costs next winter, said Beth Parent, communications manager for the utility.
The main driver behind the rate decrease is the declining wholesale cost of natural gas, which is down 16.6 percent since last year, according to testimony Vermont Gas filed with the PUC. The company can only profit off its assets and not the cost of gas itself, and files quarterly adjustments based on changes in gas cost.
While the wholesale cost of gas is down, the company’s operations are not. In its rate request, Vermont Gas filed for a 5 percent increase to its “base rate” — which goes toward operating expenses and infrastructure. The utility hopes to make investments in safety, improve its online customer service system, and continue developing their renewable natural gas program, said Parent.
One of those safety-related investments is installing “smart” devices at gate stations, which are where gas flowing through a main pipeline enters distribution lines, to collect data on pipeline integrity, according to testimony filed with the PUC by Eileen Simollardes, vice president of regulatory affairs for Vermont Gas.
“While Vermont Gas has a long history of proactive investments in safety, the tragic events in Massachusetts this past fall have caused us to take a hard and clear eyed look at our safety practices,” she wrote.
The company has been involved in an ongoing state investigation into construction of the Addison County pipeline. Parent said costs associated with that and other legal matters are not part of this rate request, though the company may seek to recover those in future rate requests.
Vermont Gas is also asking to make a $6.4 million withdrawal from a pool of ratepayer money called the System Expansion and Reliability Fund, or SERF, to offset what would otherwise be a higher base rate increase. The SERF was collected from customers to reduce the impact of the Addison County pipeline on those rates.
Dan Burke, special counsel with the state Department of Public Service’s public advocacy division, said it was too early on in the rate review process for DPS to comment on the request.
