ON&G; customers could foot bill in $9.5 M base rate increase
Oklahoma Natural Gas' base rate may soon be going up, but even if it does, the company says most of its customers will pay less money in 2012 than they did in 2010 for service.
An Oklahoma Natural Gas letter sent to its customers recently specified that the rate increase would be offset by lower fuel cost factors. The elimination of riders to recoup expenses, which were added under the old rate structure, also would balance the proposed base rate increase of $9.5 million annually.
In fact, the letter explained that the average monthly service charge for residential customers would rise about $1.17 but overall bills, including lower fuel-cost adjustments, would fall $105 annually this year compared to 2010.
As for small commercial customers, they would receive a monthly increase of $4.20, but once again with the recent elimination of riders and consideration of natural gas costs, the company estimates the average customer would pay $419.19 less in 2012 than in 2010.
Finally, larger commercial customers would see a decrease of approximately 85 cents under the proposed increase, but overall bills would be almost $500 less for average customers in 2012 than in 2010.
ONG's proposed rate increase is subject to approval by an administrative law judge and Oklahoma's three Corporation Commissioners, who are scheduled to begin hearings at 10:30 a.m. June 28 in Courtroom B, first floor of the Jim Thorpe Office Building, 2101 N. Lincoln Blvd.
If approved, Oklahoma Natural Gas would implement the proposed rate change later this year.
"We look at it every year," Brandy Wreath, acting director of the regulatory panel's public utility division, said. "We look at all the revenues and expenses on a yearly basis. Then, once a year, they have a filing and we decide if they've earned as much as they're supposed to."
Oklahoma Natural Gas originally sought a $16.2 million hike under its annual performance-based rate structure, but the increase was carved down by $6.7 million under a joint stipulation that involved the state Attorney General's Office, Oklahoma Industrial Energy Consumers and the Corporation Commission's public utility staffers, officials said.
The proposed increase is the first for the company since December 2009 when it requested $54.5 million and will help recover increased business costs and natural gas infrastructure investments made since 2008.
The old system focused on "rate of return" on a gas utility's investment over a longer period, but the newer performance-based rate involves an annual review of whether they are making or losing money. The new system also eventually eliminates the temporary riders, or tariffs, sometimes added to bills to cover specific expenditures.
