PDF: Steve Lindsey testimonyPDF: Terry Buckner testimonyIf you goThe Tennessee Regulatory Authority will hear public comments on the proposed Chattanooga Gas Co. rate increase at 6 p.m. tonight at the Hamilton County Courthouse Fourth Floor meeting room.By the numbers* $2.84 — Average increase in monthly gas bills if rate increase is approved* $2.6 million — Increase originally proposed by Chattanooga Gas last November* $700,000 — Additional amount sought for legal expenses by Chattanooga Gas from last rate case* 61,000 — Number of Chattanooga Gas customers in Hamilton and Bradley countiesSources: Tennessee Regulatory Authority, Chattanooga Gas Co.
Chattanooga Gas Co. wants to change the way it prices natural gas in Chattanooga and Cleveland, Tenn., a move that its officials say will encourage more conservation and energy efficiency.
But in response to the utility’s proposed rate change, the consumer advocate for Tennessee’s attorney general suggests that the gas company is the one that needs to be more efficient.
Rather than raise and shift rates by up to $3.4 million as suggested by Chattanooga Gas, the attorney general’s office contends the utility could actually cut what it charges consumers overall by up to $330,435 a year.
Consumers will get their chance to voice what they prefer for gas rates during a public hearing at 6 p.m. tonight at the Hamilton County Courthouse.
The Chattanooga rate case already is drawing statewide interest because other gas utilities in Tennessee also want to price gas in a similar manner and would like to add legal expenses to their rate cases, as proposed by Chattanooga Gas.
“This is a potentially precedent-setting case in at least two areas,” said Henry Walker, an attorney for the Chattanooga Manufacturers Association, which is opposed to the rate increase.
The Tennessee Regulatory Authority, the state agency conducting tonight’s hearing, must decide in May how much, if any, rate change to grant Chattanooga Gas. Any change in the utility’s rates will become effective in June.
Larry Buie, general manager for Chattanooga Gas, said the proposed new rates would allow the utility to recover its investment and offset higher operating expenses while still encouraging consumers to use less gas.
“This new rate plan would enable us to offer energy efficiency programs to our customers to help lower their monthly energy bills and still allow us to recover the costs related to operating a safe and reliable system,” he said.
The current rate structure encourages gas suppliers such as Chattanooga Gas to sell more of their product to make more money. Chattanooga Gas is proposing to separate natural gas consumption from the company’s revenue requipments so the utility will be encouraged to help consumers cut their overall consumption.
Similar changes have been adopted in 20 other states, but the Tennessee Regulatory Auhority recently rejected such a rate restructuring proposed by Piedmont Gas in Nashville.
The consumer advocacy authority has objected to allowing utilities to make as much money when they sell less product, claiming that if the company is guaranteed a profit, then its profit rate should be cut.
In testimony filed with state regulators, regulatory analyst Terry Buckner suggested that Chattanooga Gas should get only $40,000 more in revenues, not the $2.6 million requested by the utility, plus $700,000 in previous legal expenses.
If rates are changed to ensure Chattanooga Gas gets a certain amount of money, regardless of how much gas is actually sold, then Mr. Buckner said the utility should earn a lower rate-of-return on its investment and the company’s total revenues could be cut by $330,435.