Answers about the Chattanooga Gas Rate Case
It’s time to reward natural gas customers for energy-efficiency
An Op-Ed by Steve Lindsey, Vice President and General Manager, Chattanooga Gas Company
Chattanooga Gas Company has provided reliable, efficient natural gas to the area for more than 100 years.
You might know that we are asking the Tennessee Regulatory Authority (TRA) for some changes to how we do business, specifically a new rate plan.
What you might not know is why. Today, our rates are tied to how much natural gas you use – the more you use, the more money we make. But we know that using less energy is what’s best for your wallet and for our planet.
We would like to separate the amount of natural gas you use from the part of the rate structure that enables us to recover our cost to deliver the gas to your home or business. If we are allowed to do that:
- We can establish an EnergySMART conservation program to help you become more energy efficient.
- Your participation in energySMART can lower your overall bill
- We can better meet the goals of the Tennessee legislature from 2009
To learn more about the benefits of this new rate plan, please visit our website at chattanoogagas.com. We hope that you will lend your support by contacting the members of the TRA.
Thank you Chattanooga!
Published April 19, 2010 on chattanoogan.com
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In November 2009, Chattanooga Gas requested a rate increase of approximately $2.2 million. If approved, a typical residential customer’s heating bill would go up approximately $2.40 per month or approximately $29 a year.
As a part of our filing, we are proposing energy efficiency programs designed to educate and assist our customers in lowering their monthly natural gas bills. We are also requesting a new method of billing called a “rate alignment”.
All three elements of our case deal with complex issues. Below are frequently asked questions that may help simplify these issues and explain how the new rate plan will work.
Chattanooga Gas Rate Proposal Frequently Asked Questions
Why have you filed this rate case?Our rate case is both required by the TRA and in response to increased operating costs and decreased operating revenues.
Today, rates are tied to how much natural gas customers use – the more natural gas used, the more money we make. As a part of our required rate case filing, we have proposed a plan that separates natural gas consumption from our company’s revenue requirements. This new rate plan would enable us to offer energy efficiency programs that we expect will help customers lower their monthly natural gas bills and still allow us to recover the costs related to operating a safe and reliable system.
How does a rate alignment work? A rate alignment separates the amount of natural gas that customers consume from the part of the rate structure that enables us to recover our cost to deliver the gas to homes or businesses. This “aligns” customers’ desire to reduce their energy costs with our dual goals of ensuring a fixed rate of return on our costs and creating new ways to help customers reduce their energy consumption and potentially lowering monthly bills.
Will I have trouble reading my bill?If our rate proposal is approved, customers will receive an easy-to-understand monthly bill that lists charges for fixed costs and energy consumption as distinct line items.
Why does a portion of the volume of gas sold come back to the company for recovery costs? Isn’t the point to separate natural gas usage from your operating and recovery costs? Why doesn’t the base rate cover that entirely? Different-size houses use different amounts of gas.We must have a way to fairly charge customers for their use. Our rate alignment plan includes a base rate and a demand component that allows us to factor in the additional infrastructure and service requirements for a five-bedroom home versus a one-bedroom home.
Why would you ask for an increase in a customer’s bill during a recession?We are required, under Tennessee regulatory guidelines, to file this case as part of the last resolution of our 2006 case. We understand money is tight for everyone, which is why this proposal includes energy efficiency programs. If approved, these “energySMART” programs could help offset the marginal increase most customers would see in their bills.
Our proposal also includes a new rate alignment plan, which would cap our allowable profits under Tennessee Regulatory Authority guidelines. Finally, by breaking the traditional link between natural gas consumption and our profits, our proposed rate structure provides us with new incentives to help customers reduce their monthly bills.
I already conserve energy. How does your proposal benefit me? Why do I have to pay more for efficiency programs I don’t need?Educating consumers on energy efficiency is key. Customers might believe they are getting the most from their conservation efforts when, in fact, there could be many options available of which they are unaware. Our proposed energySMART programs will offer a variety of initiatives that can help even the most efficient customers save money.
What is included in the energySMART program?Our energySMART proposal – modeled after successful programs offered by our sister utilities in other states – would include free programmable thermostats, home weatherization initiatives, high-efficiency natural gas appliance rebates and energy education programs. Participating in energySMART programs could save customers up to $280 annually.
Why are you trying to recover $750,000 in legal fees during this case? Is that a part of the approximately $2.2 million you are asking for?Recovery of legal fees stems from a 2006 case. We have been working with the state to resolve this issue for more than two years and had hoped to keep it separate from our current rate case, the Tennessee Regulatory Authority is requiring that we include it as a separate item, or “rider,” attached to our rate case. Ultimately, however, our request to recover these legal fees is not tied the requested rate increase.