Ocean City Today

Public service commission to fight natural gas rate hike

By Brian Gilliland | Sep 07, 2017

(Sept. 8, 2017) At the beginning of August, proposed rates went into effect for natural gas customers supplied by Eastern Shore Natural Gas, including Sandpiper Energy in Worcester, but the state’s Public Service Commission is challenging that structure before the Federal Energy Regulatory Committee, which regulates the transport pipelines.

The PSC asserts, in a press release, the proposed rates, and the way they were formulated, are “unjust, unreasonable and unfairly burden gas transportation customers on the southern end of its gas transmission pipeline system — an area that includes the Eastern Shore region.”

The Eastern Shore Natural Gas company is the interstate natural gas pipeline subsidiary of the Chesapeake Utilities Corporation.

ESNG transports natural gas across the peninsula for distribution to residential and small commercial customers via local companies, and for direct use by industrial businesses and electric generators.

“We value the Public Service Commission and our customers and we look forward to reaching an agreement that allows us to continue to deliver reliable service. Our company continues to invest in energy infrastructure throughout the Mid-Atlantic area. With a long history of providing safe, clean, domestic and affordable natural gas, we remain committed to maintaining a reliable infrastructure that best serves our customers and communities,” Jeffrey Tietbohl, vice president of ESNG, said.

According to the Public Service Commission, ESNG proposed a zoned rate design that imposes different prices according to where its customers are located. Its service area was divided into five zones.

Transportation rate hikes to subsidiary companies in those areas would be passed onto end users, including residential ratepayers, according to the PSC release.

Easton Utilities, cited in the release, estimates its transmissions costs would nearly double under the proposal.

“In addition to the excessive rates, the commission notes that ESNG has asked FERC to approve a return on equity of 13.75 percent, far exceeding the equity returns approved by the commission in recent state utility rate case orders,” the release states.

The rate increases should show up on fall bills, but could be refunded in future bills if the FERC overturns the proposed rate structure or if the parties settle on a different rate, according to the release.


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