The Kentucky Public Service Commission (PSC) has denied a request by Atmos Energy to increase rates, leaving the total base rate portion of the monthly bill essentially unchanged for residential customers.
However, as of May 7, the PSC issued an order that restructures the monthly bill. This restructure increases the fixed customer charge while reducing the usage-dependent charge for delivery of each 1,000 cubic feet of natural gas.
According to a May 7 news release issued by Kentucky PSC, the net effect of this restructured bill is to set the base rate portion of the monthly bill a penny below the current figure of $26.69 for a customer using an average of 5,330 cubic feet of natural gas per month.
This new rate structure took effect on Wednesday, May 8.
The news release states that Atmos submitted a rate increase request in Sept. 2018, seeking to add an additional $14.45 million in annual revenue from gas distribution operations — an overall increase of about 15.8 percent. Atmos then revised the request to $14.37 million.
Both the monthly customer charge and delivery charge were proposed to increase, which would have totaled $4.41 (16.5 percent) in the base rate portion of a customer’s average monthly residential bill.
The monthly Atmos rate that expired on May 7 was set at $17.50 per month. The proposed rate was at $20.50, while PCS’s new, approved rate is officially set at $19.30 per month as of May 8.
The delivery charge for Atmos stood at $1.7250, while the proposed rate was set at $1.990. PSC’s approved delivery charge was set at $1.3855 as of May 8.
As of May 8, the total base bill will lower by an average of one penny, starting at $26.69 per month and falling to $26.68 per month for the average customer.
In its application, Atmos proposed discontinuing a separate surcharge that funds a program to replace old, potentially unsafe natural gas pipelines. Instead, the utility proposed funding that program through its increased base rates.
While Atmos’s proposal was denied, PSC changed the way Atmos will recover future pipeline replacement costs, the release states. Atmos will now be allowed to base its surcharge on estimated costs for the future rather than on actual costs for a 12-month period ending in September of each year.
The forecasted costs and actual costs will be reconciled annually in a proceeding that takes place before PSC, with a recalculated surcharge taking effect every October. A $28 million spending cap for the program was placed by PSC.