CHARLESTON, W.Va. — Mountaineer Gas is seeking a pair of rate increases simultaneously through the state Public Service Commission.
The company made two separate proposals to the Commission in recent days seeking a hike in the cost of the gas purchase rate, which is set annually and an adjustment in the rates to cover the cost of infrastructure upgrades.
Tom Westfall, vice-president of Gas Supply and Technical Services for Mountaineer Gas, recently explained those two rates are very different things.
“Purchase gas cost is all cost related to the gas commodity itself as well as the transmission and storage services we pay to other pipelines to get the gas to our system. Infrastructure improvements is a mechanism to recover costs and allowed rate of return on investments we make every year on infrastructure,” Westfall told MetroNews.
The infrastructure improvement plan for Mountaineer Gas is almost exclusively a replacement of steel pipe with modern materials.
“We have about 6,200 miles of main line throughout the state and I believe we’re still at about 1300 to 1400 miles of bare steel pipe still in the ground that we will be replacing over the next 20 years,” he said.
The company replaces an average of 50 to 60 miles of that bare steel pipe every year.
The purchase gas cost is adjusted annually. Westfall explained since gas is a commodity the price changes constantly, so they always have to adjust their costs once a year, by statue, to stay in line with the cost. Sometimes it goes up and sometimes it goes down.
The company has asked for an increase of $44.5 million from present gas purchase rates. If approved, that would drive up the average customer’s bill by about $12.51 a month. Typically the new gas purchase rates kick in Nov. 1.
The increase to recover the investment in new infrastructure is about $77 million and would add about $2 onto the average customers monthly bill.
If both were approved, the total increase would be around $14.02 a month or 17 percent for average gas customer households. Those wouldn’t be totally implemented until January 1, 2026.
“On the gas cost, that rate goes up and down with the market and we’ve had substantial decreases in the past and we will in the future, that all depends on the gas market,” said Westfall. “As far as the infrastructure, we do have a lot of aged pipe that has to be replaced to provide safe, reliable service and there has to be recovery of those costs over time. We believe that’s the right thing to do for our customers to provide safe, reliable service.”
The state Public Service Commission will set a schedule on when it will make its decisions.