Customers of CenterPoint Energy Indiana North will soon see a decrease in fixed charges for natural gas.
The Indiana Office of Utility Consumer Counselor (OUCC) announced the Indiana Utility Regulatory Commission has approved a settlement agreement that reduces natural gas base rates for customers of the former Vectren North territory, which includes Columbus customers.
The order will reduce the utility’s annual base rates by almost $6 million. However, customers throughout the state are still expected to see higher heating bills due to rising wholesale gas costs.
“We appreciate the commission’s approval of this agreement and are grateful for the parties’ collaborative efforts to reach a fair resolution,” said Indiana Utility Consumer Counselor Bill Fine in an official statement. “Significant investments the utility has made in recent years will improve the gas distribution system’s reliability and safety. At the same time, this case provided the opportunity to identify savings offsetting the needed infrastructure costs.”
The agreement was reached by the OUCC, a group of the utility’s industrial customers, the Citizens Action Coalition of Indiana, Direct Energy Business Marketing and CenterPoint Energy.
Under the agreement, monthly fixed charges on a residential bill decrease from $18.49 to $16.50. The utility’s “fixed, monthly charge for infrastructure improvements and federal pipeline safety mandates” will reset from $7.24 to $0 in January. However, the residential natural gas customer service charge will rise from $11.25 to $16.50.
Base distribution rates cover “non-gas costs” such as operation, maintenance and capital infrastructure improvements. The remainder of a CenterPoint residential monthly bill is the cost of the gas itself.
Officials stated that the settlement agreement will not affect wholesale gas costs, which are expected to “increase bills for all major Indiana gas utilities this winter.” Consumers are advised to expect higher heating bills, the utility said.
Earlier this year, the OUCC recommended denial of CenterPoint’s request for a natural gas rate increase for those in the former Vectren North territory. The initial request would have raised monthly fixed charges on residential natural gas bills to $21.50. It was expected to raise annual revenues by $20.8 million in two phases. The utility’s testimony stated that the request was due to higher operating and maintenance costs, and $818 million in infrastructure investments since 2008.
However, the OUCC recommended reducing charges to $12. The agency said its analysis showed that a rate reduction of $26.9 million is “justified based on the case’s current evidence and applicable law.” Fine also cited “savings and opportunities for savings that more than offset the need for the requested rate increase.”