Piedmont Gas asks savers to pay more

Proposal went to regulators after lawmakers rejected it By Anne Paine • THE TENNESSEAN • January 21, 2010 PagePiedmont Gas is seeking approval from the Tennessee Regulatory Authority to allow rate increases when residents use less natural gas, a plan that fell apart in the state legislature last spring. The utility, formerly known as Nashville Gas, is touting the proposed change as an environmentally friendly move that would encourage customers to use less energy because profits would no longer be tied to selling ever-larger quantities of natural gas. Known as "decoupling," the plan would allow Piedmont to charge varying rates that would go up in compensation for less use. The current rate structure charges customers for what they use, along with across-the-board service fees. If the company's income remains based on volume of natural gas sold, she said, the company would be penalized with lower profits if it encouraged energy conservation. The Consumer Advocate and Protection Division of the Tennessee Attorney General's office has said the measure would gouge consumers since it appeared last spring. "While decoupling sounds at first like a good way to encourage conservation, without safeguards it has allowed companies to reap profits grossly in excess of benefits from conservation, all at the expense of the ratepayer," said Vance Broemel, an attorney in that office. Broemel's division filed documents with the TRA saying that resulting residential rate hikes the first year would bring in $1.9 million for the company while the company's lost revenue would total $20,000. A panel of TRA commissioners is scheduled to make a decision on whether to approve. Piedmont's request Monday State Rep. Susan Lynn, a Mt. Juliet Republican, said she was annoyed to learn this week that Piedmont had quietly taken the plan to the TRA after it faltered in the legislature. "Obviously, last year they thought it required a bill and now they're trying to get away with it without a bill." Lynn said. "As people use less of the utility's products their rates actually increase. It's just wrong." Lynn had opposed the controversial bill that Piedmont and other private gas companies hoped to see pass last spring. The House Commerce Committee voted 18-13 to send the bill to a study committee, where it died. Then, Piedmont went to the TRA, where hearings on the matter were held this fall. Piedmont insists the company is being straightforward and that the plan would benefit everyone. "Certainly, there was no intention to do an end run around lawmakers," said Lorree Elswick, spokeswoman at Piedmont headquarters in Charlotte, N.C. "We're just trying to align our interests with our customers so we can be supportive of energy conservation as a whole. … We want to do the right thing and be good corporate citizens." If the plan had been in place since 2003, when the company got its last rate hike, Piedmont would have gained an extra $19 million, according to testimony to the TRA. Frank Yoho, in Piedmont's rate office, said he thought the $19 million figure estimate was "fairly high." "The focus now is on going forward," he said.