Tennessee Attorney General Bob Cooper and Piedmont Natural Gas Company, Inc. (“Piedmont”) have reached an agreement that reduces Piedmont’s pending request for a rate increase by almost 30%, saving Tennessee ratepayers $4.8 million. The agreement was approved at a hearing today by the Tennessee Regulatory Authority (“TRA”). In September of 2011, Piedmont asked the TRA to approve a general rate increase of $16.7 million. This request was Piedmont’s first such request since 2003 and was a proposed increase to the rates Piedmont charges its customers for the delivery of natural gas.
The Attorney General’s Consumer Advocate and Protection Division intervened on behalf of ratepayers and reviewed the supporting materials submitted by Piedmont as well as additional financial information it obtained from Piedmont related to the request. The Attorney General’s Office subsequently filed testimony and other documents indicating Piedmont was due, after 8 years, a rate increase of no more than $9.9 million, or more than 40% less than Piedmont’s request. After negotiations, the Attorney General and Piedmont agreed on an increase of $11.9 million or almost 30% less than Piedmont’s original request.
Concurrently, the actual cost of the natural gas itself has continued to fall over the past several quarters due in large part to the discovery of new sources of natural gas in the United States. Industry analysts expect that this drop in gas prices will offset most if not all of the increase in the rates called for in the agreement. This means that despite the rate increase for Piedmont’s delivery of natural gas, many if not all consumers will actually see a drop in their monthly bill because of the falling cost of the natural gas they consume.
“Although we never like to see rates for utilities rise, this is the first increase in 8 years to the rates Piedmont charges its customers.” Tennessee Attorney General Bob Cooper said. “However, for most consumers, any rate increase will be more than offset by the new lower wholesale price for natural gas leading to lower monthly bills and less impact on Tennessean’s pocketbook.”
The new rates will go into effect on March 1, 2012.