Oklahoma Natural Gas customers concerned over a proposed rate increase questioned regulators and company officials Thursday over higher service charges on their bills.
ONG requested a rate hike of $16 million, but has agreed to a $13.7 million settlement with regulators, the attorney general’s office and a group of industrial consumers. The proposed increase would add $1.52 to the service charge portion of residential customer bills.
The utility, which has 847,000 customers in Oklahoma, requested the increase to recover $250 million it spent on replacing and repairing pipelines and for smart meters and other infrastructure since 2012.
Several customers showed up to a public hearing Thursday at the Oklahoma Corporation Commission in Oklahoma City.
One customer, Mark Burkett, of Oklahoma City, asked why he has to pay for a service charge in the summer months when he doesn’t use any natural gas. Burkett said he’s been an ONG customer for 22 years and has seen the service charge rise from nothing to $6 and now more than $13.
“I fail to see how it’s fair, just and reasonable,” Burkett said.
ONG representatives and staff from the commission’s public utility division spent about half an hour after the public hearing to answer customer questions.
In response to Burkett, they said the service charge goes toward paying for the pipelines and other infrastructure needed for service. Utilities in Oklahoma aren’t allowed to profit on the cost of natural gas, which is passed on to customers and also includes storage and transportation costs.
Another customer questioned the process at the Corporation Commission, saying she suspected utilities ask for more in rate increases but know they will settle for a smaller amount.
“This makes me wonder if this practice of request and settle has conditioned the utility companies to request generally more than is needed in order to comfortably settle for less,” said G. Kay Powers. “Could this practice of request and settle be similar to ‘sue and settle,’ which has been used as a means of wealth transfer rather than decisions on the merits of the case?”
How much it will cost
Under the settlement, residential customers using less than 50 dekatherms of gas a year who pay an additional delivery charge for gas would see their monthly service charge rise to $14.73. Residential customers using more than 50 dekatherms a year — who don’t pay a delivery charge — would have a new monthly service charge of $30.28. A dekatherm is the energy equivalent of 1,000 cubic feet of natural gas.
Customers who have qualified for the state’s Low-Income Home Energy Assistance Program won’t be subject to any increases in their monthly service charge.
Small commercial and industrial customers would see their monthly service charge rise 39 cents. The monthly service charge for large commercial and industrial customers would fall 35 cents, according to the proposed settlement.
After hearing short testimony from representatives from ONG and the commission’s public utility division staff, Administrative Law Judge Jacqueline Miller said she will take the matter under advisement. Her recommendation will go to the three-person Corporation Commission for final approval.
I fail to see how it’s fair, just and reasonable.”
Oklahoma Natural Gas customer