Dominion East Ohio received the OK from state regulators on Wednesday to increase the amount of money it will spend on replacing aging pipelines. But that also means it can more than double what it charges residential customers in the next five years to recoup its costs.
Customers currently pay $8.12 per month to fund a massive 25-year pipeline replacement plan, which began in 2008.
The proposal approved unanimously on Wednesday by the Public Utilities Commission of Ohio increases the monthly fee incrementally over the next five years.
With bills beginning in the spring of 2018, the fee would be as high as $9.86 a month and potentially rise to as high as $17.20 per month in the fifth year.
Dominion says because of some new federal depreciation laws, the amounts may be slightly less than originally proposed.
The changes take effect in 2017, but would not show up until 2018 bills, according to the utility.
The pipeline replacement fee is part of $26.16 in fixed monthly charges that all customers pay, regardless of their natural gas supplier.
Other fixed portions of the bill include $17.58 for such things as meter reading and billing and 46 cents for automated meters.
All Dominion customers also pay a fee, based on usage, to deliver the gas to their homes and then a separate rate for the actual gas used.
By law, utilities are allowed to recover their actual costs from customers, with approval of the Public Utilities Commission of Ohio, or PUCO.
This spring, the Office of the Ohio Consumers’ Counsel, the state’s residential utility advocate, opposed the increases, calling for a review of Dominion’s expenses and revenues. The consumer advocacy group had asked for a five-year extension to a current cap that allows Dominion to increase the monthly fee by roughly $1.40 each year.
The caps approved Wednesday ranged from $1.75 in the first year to $1.85 in the fifth year.
“Adding $17.20 to residential consumers’ monthly bills is unjust and unreasonable and will not contribute to reasonable prices for customers,” the agency said this spring in its filings.
Officials from the consumer advocacy group were not immediately available for comment Wednesday after the PUCO decision.
Dominion East Ohio officials have said the increases in spending are needed to stay within the 25-year time frame for the project and increased construction costs.
“The PUCO’s decision continues to position Ohio at the forefront of supporting pipeline safety through replacement of older vintage pipelines,” Vice President and General Manager Jeff Murphy said in a news release.
The utility said it is replacing “nearly 5,600 miles of bare-steel, cast-iron, and ineffectively coated pipeline — enough to stretch from Alaska to Venezuela.”
Dominion said without the fee increases, the company’s 25-year program would have taken 35 years or more to complete.
During discussion before the unanimous vote, PUCO Commissioner Howard Petricoff said extending the time frame to reduce customer fees “would not be the prudent course.” The risks to businesses and residents near older pipelines “are the same or intensified.”
Betty Lin-Fisher can be reached at 330-996-3724 or blinfisher@thebeaconjournal.com. Follow her @blinfisherABJ on Twitter or www.facebook.com/BettyLinFisherABJ and see all her stories at www.ohio.com/betty.