Columbia Gas customers outraged over proposed 32% rate increase

recessionbusters-headerArticle submitted by Michael Robison/Stand Energy Corp.

Columbia Gas of Virginia industrial customers have seen their bills increase substantially since a new rate was put in place on their October 2014 bill, subject to any refunds.  While these bills reflect a 42% increase in the delivery charges, based on overwhelming opposition, Columbia Gas has proposed lowering it to a 32% increase.  A 42% or even 32% increase is substantial and will negatively impact many Virginia businesses in a big way.

The local and national economy has seen some positive growth in the last few years but the effects of the recent recession are still very prevalent.  In order for local companies to survive they have trimmed expenses, cut their margins and improved efficiencies.  This was evident by the public witness testimony during the rate case and the overwhelming amount of letters sent in to Virginia State Corporation Commission.  Steve Hilliard, Controller of George’s Chicken, which employs 1,800 in the Shenandoah Valley said: “Our utility costs are a large portion of our operating cost structure.  Becoming more uncompetitive in this area could have an impact as we discuss long-term expansion plans and staffing levels.”  Lee Beam, President of Staunton Steam Laundry (a 3rd generation family-owned uniform and linen rental company) said: “Our customers are under contract…..Most of our contracts are five years in length with a limit on price increases during the length of the contract.  We will have a very limited ability to pass along this excessively high cost increase to our customers.”

Stand Energy, a natural gas supplier in Virginia, has opposed this rate increase.  Their position supports the many customers they supply, in that the proposed increase is not reasonable.  “How can Columbia Gas ask for 32% more when the customers themselves can only ask for price increases of 1% to 3% in their respective businesses?” says Michael Robison of Stand Energy Corporation.  In Stand’s filed response they say: “….a 32% increase in a delivery service charge is simply beyond the realm of what a reasonable businessperson would expect to receive, and should be deemed unreasonable in this proceeding.”

Over the course of the rate case proceedings, almost 900 letters have been sent in to the Commission from concerned businesses and their employees.  These letters voice the concern of how the sudden rate increase will negatively impact their jobs, the local economy, and the Virginia business community.  It is clear that a sudden increase, this substantial, is more than likely to cripple many of these already struggling companies.  The proposed increase has the real potential to make Virginia less competitive when existing companies look to expand operations and perhaps more importantly, when companies outside of the area look to relocate.

Currently the rate case is under review by the Virginia State Corporation Commission and a decision is expected over the next few weeks.


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