Attorney general seeks to intervene in gas rate case

PDF: AG Cooper's petition to intervene in the Chatt Gas rate case

NASHVILLE — Tennessee Attorney General Bob Cooper on Tuesday asked state regulators for permission to challenge Chattanooga Gas Co.’s request for a customer rate increase and changes to the utility’s rate structure.

In the petition filed with the Tennessee Regulatory Authority, Mr. Cooper and attorneys in his office’s Consumer Advocate and Protection Division asked officials for permission to intervene in the gas utility’s rate case, saying “consumers may be adversely affected.”

Chattanooga Gas, a subsidiary of AGL Resources Inc., asked regulators in November for permission to increase charges by $2.6 million, about a 4 percent increase, company officials have said. The company also wants approval to proceed with a “decoupling” mechanism that would let the gas company end a current practice of recovering fixed costs based on the amount of gas used.

Doing so would encourage the company and customers to pursue energy efficiency and conservation measures, Chattanooga Gas officials said, noting 20 other states have implemented similar decoupling measures.

As part of that, the company has proposed programs that officials said would help consumers purchase programmable thermostats and energy-efficient appliances.

Larry Buie, Chattanooga Gas’ regional manager, said General Cooper’s filing is a “part of the process.

“We understand that they have a job to do and their job is to make sure that our residential customers are treated fairly in all aspects,” Mr. Buie said. “And as a gas operator we have the same interests at heart.”

In his petition, Attorney General Cooper and staff attorneys argue both the rate increase and the decoupling proposal “may result in harm to consumers.

“The Consumer Advocate alleges the design of the margin decoupling tracking mechanism may not be in the public interest and that it does not assure that the interests of CGC (the gas company) and consumers are properly aligned to further energy efficiency,” the petition says.

Mr. Buie said the decoupling provisions are “a little bit different” and noted “part of that (the Cooper filing) speaks to the need for clarity around the actual filing itself.”

While critics contend decoupling will hurt consumers, Mr. Buie said, “actually, I think it’s just the opposite. With our energySmart program that’s a part of this, we really see an opportunity for our consumers to save money. And it’s something that’s completely different, I think, from the prior focus.”

Decoupling, he said, “is allowing the gas company to help educate and put incentives in place for customers to, No. 1, use less energy and get the efficiency, the comfort level, at a lower cost.”

Officials at the Tennessee Regulatory Authority, which oversees regulated utilities, have scheduled a status conference Monday.

State Rep. Richard Floyd, R-Chattanooga, a critic of the proposed decoupling provision, lauded Attorney General Cooper’s decision to intervene in the rate case.

“I’m glad to see them getting involved in this thing,” Rep. Floyd said. “The fallacy of this request and the reason for it is definitely not to conserve usage. This is a marketing ploy, a business strategy that’ll just increase the profitability of that company.”