Citing the ongoing effects of inflation, Roanoke Gas is seeking a rate increase, but company officials say some of it will be offset by federal and state tax credits passed to the customer.
The company’s proposal would raise the monthly bill of a typical residential customer using 5.6 dekatherms of natural gas by $4.22, or 4.9%, from $86.60 to $90.82.
The higher rate has taken effect on an interim basis as of Jan. 1 while the Virginia State Corporation Commission reviews the company’s request.
But Roanoke Gas secured federal and state tax credits that will be returned to customers as a $2.94 monthly bill credit for the four months of January through April, so the net impact for an average residential customer would be a $1.28 increase during those months, according to Tommy Oliver, vice president of regulatory affairs and strategy for Roanoke Gas.
“We recognize the hardship this increase may have on some of our customers,” Oliver said in an email. “However, like our customers, we continue to experience inflationary pressure on nearly all of our necessary, day to day, operating costs.”
The proposed increase is to the company’s base rates, which cover operations, maintenance and capital costs and are separate from the cost of gas. By law, Roanoke Gas must pass the cost of gas to customers without profit.
The company told the SCC that the newest increase would allow the company to earn $4.29 million more in revenue each year and achieve its authorized 9.9% return on equity, which is essentially a regulated utility’s profit margin.
Roanoke Gas told the SCC that the company is seeing higher costs of labor and benefits, insurance, professional services and IT support. Furthermore, an anticipated higher interest rate on a bank note set to mature soon will add more than $500,000 in annual interest.
The SCC finalized a separate rate increase less than a year ago that added about $4 to the typical Roanoke Gas residential bill.
The SCC will hold a public hearing at 10 a.m. July 15 about the request. It will be broadcast online.
Anyone who wants to speak during the hearing must sign up by June 30 by completing a public witness form for case PUR-2025-00209 or by calling the SCC at 804-371-9141.
The SCC also will accept written comments online or by mail to the Clerk of the State Corporation Commission, c/o Document Control Center, P.O. Box 2118, Richmond, VA 23218-2118. Comments must reference case PUR-2025-00209.
If the SCC ultimately approves a lower increase than what has been enacted on an interim basis, the company must refund customers the difference.
Roanoke Gas serves about 64,500 customers in the Roanoke Valley.
Correction, Jan. 6: This story has been updated to clarify that the $2.94 bill credit will be applied for four months, from January through April.