Rate Case Roundup: Maryland

In another natural gas rate docket, the Maryland Public Service Commission endorsed a proffered settlement giving the subject LDC, Columbia Gas of Maryland, a rate increase of $2.4 million. That represents about one-third of the company's original request for a rate hike of $6.02 million. That amount was later revised downward to $5.04 million instead. 

According to the commission, that dollar amount translates into an increase of about 5%, which it deemed to be much more preferable than the increase of more than 16% first planned by the company. The commission also praised the ROE terms of the stipulation in that the parties agreed to a 9.70% value, the same as had been adopted in the company's last base rate case. Columbia Gas itself had recommended a 10.90% ROE. 

In seeking higher rates, the company had pointed to an ongoing need to upgrade its facilities, especially in replacing aging and deteriorating bare steel and cast-iron pipelines. The company asserted that it had been investing millions of dollars in such capital projects every year. The commission ruled that such needs clearly warranted some measure of rate relief, noting that the issue of infrastructure replacements was a serious matter being confronted by LDCs all across the nation. 

In presenting the settlement to the commission, the signatory parties revealed that one topic had been debated the most, that being the correct level for monthly customer charges. They related that whereas the LDC had originally wanted to raise the residential charge from $14.25 to $18.04 per month, others had advocated for no increase at all or one no greater than an additional 27 cents per month. 

In the end, they agreed on a residential system charge of $14.52 per month, which reflects the 27-cent adder. The commission commented that that increase approximated the average 1.9% increase in the LDC's revenue requirement as listed in the stipulation. And the commission concurred that the upward adjustment in the customer charge was consistent with both the principle of gradualism and its rate-making policy of the cost-causer being the cost-payer. Re Columbia Gas of Maryland, Inc., Case No. 9447, Order No. 88392, Sept. 19, 2017 (Md.P.S.C.).