KENTUCKY PRESS NEWS SERVICE
The Kentucky Public Service Commission has granted Atmos
Energy Corp. an annual revenue increase of $8.55 million, or 5.5 percent,
which is $4.817 million less than the amount sought by the utility.
For a typical residential customer using an average of 5,000 cubic feet
per month, the base rate portion of the bill will increase by $1.99 per
month, or $23.88 per year. The monthly customer charge will increase to
$16. Atmos Energy serves about 173,000 customers in Crittenden and 37 other counties in
western and central Kentucky.
The current monthly customer charge is $12.50, plus a $2.61 monthly
surcharge that pays for speedier replacement of aging gas mains. The
surcharge resets to zero with this rate adjustment. The gas delivery
charge will rise from the current $1.10 per 1,000 cubic feet to $1.32
per 1,000 cubic feet.
In an order issued today, the PSC stated that the adjusted rates will be “fair, just and reasonable.”
Tuesday’s order applies only to Atmos Energy’s base rate, which covers
the utility’s cost of operating and maintaining its system, as well as
any profit margin. The commodity cost of the gas itself, which is
adjusted quarterly to reflect market prices, is determined separately
and is passed through to consumers on a dollar-for-dollar basis by Atmos
Energy, with no additional profit for the utility.
Atmos Energy originally sought to increase its annual revenue from gas
operations by $13.367 million, or 8.6 percent. The company proposed to
increase the monthly customer charge to $16 from the current $15.11 –
the $12.50 customer charge plus the $2.61 surcharge.
Atmos Energy proposed to increase the gas delivery charge to $1.63 per
1,000 cubic feet. The increase sought by Atmos Energy would have
increased the typical residential bill by $3.54 per month, or $42.48 per
year.
As permitted by Kentucky law, Atmos Energy put its proposed rates into
effect Jan. 24. As a result of the PSC decision to set lower rates, the
company will have to refund the amount it has over-collected since that
date, plus interest, to its customers.
The principal adjustment made by the PSC to the rates requested by Atmos
Energy was a reduction in the company’s proposed return on equity,
which represents the opportunity to earn a profit. The reduced rate of
return will still permit the company to borrow money at reasonable
rates, maintain service levels and financial integrity and invest for
the future, all at “the lowest possible cost to ratepayers,” the PSC
said.
The PSC denied a request by Atmos Energy to charge $10 for placing door
tags warning customers who are facing disconnection due to unpaid bills.
Atmos Energy did not provide evidence that such warnings would be
effective in reducing disconnections or supply data justifying the cost,
the PSC said.
