Gas Rate Hike Stirs Controversy in VA

Posted March 13, 2015 at 12:52 pm

Read the Letter to the Editor

The president of Staunton (VA) Steam Laundry was recently quoted in a letter to the editor of the local daily newspaper thanks to her submission to the state’s docket involving Columbia Gas of Virginia rates.

The letter to the News-Leader, from an account manager for Stand Energy, an alternative natural gas provider, observes that the state has received 900 such submissions. Most were from businesses concerned about the increase because it’s difficult to pass higher gas costs along to customers as the pace of economic recovery remains slow.

Lee Beam of Staunton Steam wrote that her third-generation business is finding it nearly impossible to get customers on long-term contracts to accept the expenses associated with Columbia’s fuel hike.

The Stand Energy letter notes that the utility raised rates in October 2014 with a 42% increase in delivery charges. While Columbia has proposed lowering that rate hike to 32%, this hasn’t eliminated concerns. The state Corporation Commission is reviewing that proposal and a decision is expected shortly.

In a response to Textile Services Weekly’s inquiry on the impact of the increase, Columbia spokesman Robert C. Innes noted the relative lack of importance of delivery charges (one component of a utility bill) to the overall cost to industrial users. These charges also include distribution and customer service.  Delivery is typically 10% to 20% of an industrial customer's bill, depending on the service classification received. Most of the remaining 80% to 90% is the gas itself, which is not included in base rate adjustments. “Gas costs are not marked up by Columbia, but rather are passed on to customers on a dollar for dollar basis,” Innes said.

Columbia’s 2014 rate case may see an increase in delivery charges, but because of low commodity prices, some customers will see very little change in their monthly bills, he explained. A commercial laundry in either the “transportation” or “small general” service rate class can expect an increase of less than 6% to a total monthly bill.