State regulators have approved an increase for Columbia Gas of Virginia’s non-gas rates and charges that would add about $6 to the average residential customer’s monthly bill.
The average customer using 5.1 dekatherms of gas monthly will see their bill increase from $76.26 to $82.47, up 8%, according to terms filed with regulators in December and approved on Thursday.
Non-gas base rates and charges cover operations, maintenance and capital expenses. By law, the company must pass the cost of gas on to its customers without profit; production, weather, world events and other factors can impact natural gas prices.
The company will be allowed to earn $40.7 million more each year to cover capital investments and other expenses.
“Ensuring continued, long-term safety and reliability for our customers and the communities we serve is essential,” Jennifer Montague, the company’s president and chief operating officer, said in a news release. “Our mission requires the necessary level of investments to modernize our energy infrastructure for our customers’ current and future energy needs.”
The increase is less than what Columbia Gas asked for in April, when it asked the State Corporation Commission for permission to earn $52.56 million more each year. That would have increased the average residential bill by about $9.
It also originally sought a return on equity — essentially, a utility’s profit margin — of 10.85%. The final terms approved on Thursday allow 9.75%. The company noted that in 2023, its earnings fell below its previously authorized range of 9.2% to 10.2%.
Columbia Gas serves 290,000 residential, commercial and industrial customers in 98 cities, towns and counties throughout Virginia, including in the Lynchburg region, part of Southside, and Alleghany and Giles counties. It is a subsidiary of Merrillville, Indiana-based NiSource (NYSE:NI).