Vectren’s $27 Million Natural Gas Rate Increase and Your Opportunity To Not Pay It

All of the jubilation over gas prices declining may soon be over. The bad news is not that gasoline is going to rise again; that is inevitable. The bad news is that your property taxes and natural gas bill may be increasing shortly.

Property taxes are going up because our government reassessed property values upward. If local voters approve the various November tax levies, you will be paying an additional $202 in 2009. Three levies that will increase you property taxes are Xenia Community School bond issue, Greene County Children Services and Community Mental Health operational issues.

According to the Office of the Ohio Consumer’s Council (OCC), Vectren asked the Public Utilities Commission of Ohio for permission to raise its natural gas delivery rates. Vectren wants to raise the $7 customer charge listed on your monthly natural gas bill to $16.75 beginning this November and ending in April 2009. From the low usage period beginning in May and ending in October, Vectren proposes to decrease the rate to $10 per month. Vectren’s ultimate goal is a winter monthly rate of $20.04 and summer rate of $11.96. The customer charge covers the property and facilities, metering, meter reading, billing, and other administrative costs.

At the same time, Vectren proposes to reduce its delivery service rate. This is a charge based on the volume of natural gas delivered to your home. The current rate is $0.1199 per CCF (100 cubic foot) for up to 50 CCF. Above 50 CCF, the rate decreases to $0.1044. Vectren wants to reduce further the rate beginning this November to $0.10937 and to $0.01397 in May 2009. In November 2009, Vectren proposes to reduce the delivery rate further to $0.08754 during the winter months and $0.07534 during the summer season. Vectren probably hopes consumers will think they are balancing the cost of natural gas delivery by further reducing this rate, but you will see later that it is not the case.

Using US Department of Energy data, the average Ohio residents used about 834 CCF in 2007 of natural gas in 2007. Extrapolating this data to Vectren’s 318,000 customers, natural gas customers in the Miami Valley used about 265,076,177 CCF and paid Vectren around $29.7 million in delivery costs. Applying Vectren’s proposed new rates, local customers will pay $29.6 million from November 2008 to October 2009. During the next 12 month period, local customers will pay a measly $21.7 million.

By comparison, Miami Valley customers paid about $26.7 million in customer charges. Applying Vectren’s proposed increases, local customers will pay $51 million during the period from November 2008 through April 2009. Vectren’s ultimately wants Miami Valley customers to pay $61.1 million a year beginning November 2009.

The total first year increase to Miami Valley natural gas users is $24 million and addition $2 plus million the second year, which is a total increase of $26 million.

Vectren’s proposed delivery rate increase does not include the cost of natural gas. It does not include a pipeline replacement cost recovery rider that will be added to every customer’s bill. It does not include the other half-dozen cost and lost revenue recovery riders also billed to all Vectren customers. It is not reflect the increasing profits made from commercial customers. It does not reflect increasing profits from fees charge to other gas companies for delivering their gas to your home.

Vectren’s CEO has about $202 million reasons for increasing your natural gas rates in order to continue growing Vectren’s investor dividends. I image most of the board of director are similarly motivated. And that is not all; they also intend on owning all public pipelines paid for by all member of our communities. As wrong as that is, Public Utilities Commission of Ohio (PUCO) collusion with Vectren’s plans is unconscionable.

That is why all natural gas customers have an opportunity to oppose Vectren’s proposed plans. You can write PUCO at the address listed below:

Public Utilities Commission of Ohio
Attn: Docketing Division
180 E. Broad Street
Columbus, OH 43215

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