AARP objects to natural gas rate hike proposal

Natural gas is an indispensable part of our modern lifestyle. It supplies about one-forth of the energy consumed in the United States. But if Piedmont Natural Gas Company gets what is is asking state energy regulators for, residential customers will see rates increase by almost 12 percent. AARP weighed in with the NC Utilities Commission asking them to trim and reject parts of the company's rate hike request.

Piedmont provides natural gas for about two-thirds of North Carolina including most of Eastern and Central NC as well as eight western counties. AARP encourages all who are concerned about fair and reasonable utility rates to sign up for important AARP Action Alerts to stay up-to-date and to take action when needed.

The following was entered into the public record in opposition to Piedmont's rate hike proposal:

July 14, 2021

North Carolina Utilities Commission
430 North Salisbury Street
Dobbs Building 5th Floor Raleigh, NC 27603-5918

Dear NC Utilities Commissioners,

AARP is pleased to provide comments on the Piedmont Natural Gas Company rate case, Dockets No. G-9, Sub 722, No. G-9, Sub 781, and No. G-9 Sub 786.

AARP represents over 1.1 million North Carolinians, including many who are on fixed incomes and are struggling with day-to-day living expenses. AARP has long advocated for utility rates that are fair and reasonable, helping meet both our future energy needs as well as the needs of residential customers. We therefore have several concerns with the proposal:

The increase is too large.

Residential customers would face an almost 12% increase. We urge the NCUC to closely review the company’s spending and trim any unnecessary spending to reduce the rate increase.

The increase is unfair.

Residential customers would see an 11.9% increase while large customers on interruptible rates would see only a 5.2% increase. AARP opposes efforts to unfairly shift costs to captive residential customers. They should not be singled out for such inordinate increases.

The commodity rate increase at 17% is too large. 

Piedmont proposes a hefty increase to the commodity cost of 17.1% in the winter and 17.9% in the summer. Such substantial increases are alarming and should be closely scrutinized.

The integrity management rider (IMR) should be allowed to expire.

AARP opposes single issue riders that fast track cost recovery and bypass traditional regulatory scrutiny. Such costs should be folded into base rates.

The IMR recovers Piedmont’s cost of compliance with federal pipeline safety requirements. A rider is not necessary for compliance. AARP urges the commission to end this rider.

The rate of return is too high.

Piedmont seeks a rate of return of 10.25% which is about 1 percentage point higher than the national average. We urge the NCUC to trim the request.

A new rider for energy efficiency cost recovery is not needed nor is a return on energy efficiency spending.

Piedmont proposes a new rider to recover costs of various approved energy efficiency programs, or, alternatively, authorization to defer costs to amortize them as a regulatory asset where they would earn a return on spending in a future proceeding.

AARP opposes both the use of single-issue ratemaking via riders as described above as well as Piedmont’s alternative proposal. Treating energy efficiency spending as a capital asset where the utility earns a return would drive up the cost of such programs and is therefore inappropriate. Utilities typically earn a return on assets, not spending. We urge the NCUC to reject these proposals.

AARP appreciates this opportunity to comment.

Sincerely,

Mike Olender, director, AARP North Carolina