New customer service benefits included
The Indiana Office of Utility Consumer Counselor (OUCC) and Vectren Energy Delivery have reached an agreement regarding natural gas base rates for Vectren customers in southwestern Indiana. The settlement agreement has been filed with the Indiana Utility Regulatory Commission (IURC) and would require IURC approval in order to take effect. A.K. Steel - which formally intervened in this case through legal counsel - has also signed the agreement.
The settlement would provide Vectren with a $5.3 million increase in annual gas delivery revenues for its "South territory," which covers nine southwestern Indiana counties. Vectren originally requested a $10.4 million base rate increase while the OUCC - the state agency representing consumer interests in IURC proceedings - filed testimony in January recommending a $5.1 million increase.
In addition, the agreement will provide several new customer service options if approved. The service options are aimed, in part, at addressing specific customer concerns raised at the January 8 public field hearing in this case in Evansville.
Major provisions of the agreement - pending in IURC Cause No. 43112 - include the following:
- A return on equity (ROE) of 10.15 percent. Vectren had requested an 11.75 percent ROE for its southwestern Indiana gas utility; in testimony, the OUCC had recommended a 9 percent level.
- A 25-cent increase in the customer facilities charge. This flat monthly residential service charge on gas bills would increase from $10.75 to $11.00, compared to Vectren's original request of $16.00.
- Agreed amounts for various personnel expenses and operating and maintenance costs. These include the utility's acceptance of the OUCC's recommendations on employee training and hiring costs, agreed costs for distribution system maintenance (along with provisions for annual reports), and agreements on bad debt and pipeline safety costs.
- Costs for recovering uncollected debt and "unaccounted for gas costs" will be recoverable through Vectren's gas cost adjustment (GCA) process - subject to maximum annual limits.
- New customer service options:
- New payment sites in Evansville and Mount Vernon at which customers will be able to pay Vectren bills in person,
- The installation of a new electronic kiosk in Evansville where customers will be able to deposit cash payments with no extra fees, and
- Vectren's commitment to train one or two customer service employees to assist customers in person and face-to-face.
The natural gas base rates at issue in this case comprise approximately 25 to 30 percent of a typical residential winter heating bill and cover "non-gas" costs such as operations, maintenance and capital improvements. Actual gas costs - which account for approximately 70 to 75 percent of a typical winter heating bill - may be passed through to customers on a dollar-for-dollar basis subject to state regulatory review and approval. Gas costs are reviewed separately, four times per year, through the state's gas cost adjustment (GCA) process.
The Vectren South service territory includes the areas formerly served by Southern Indiana Gas & Electric Co. (SIGECO), including Vanderburgh, Daviess, Gibson, Knox, Martin, Pike, Posey, Spencer, and Warrick counties.
Gas rates in the Vectren North service territory - which includes areas in central, south-central and southeastern Indiana formerly served by Indiana Gas Co. - are not at issue in this proceeding.
The settlement agreement also would not affect Vectren's electric rates, which are under consideration in a separate case (IURC Cause No. 43111).
The Indiana Office of Utility Consumer Counselor (OUCC) is the state agency that represents utility consumer interests in state and federal regulatory proceedings. To learn more, visit www.IN.gov/OUCC.
(IURC Cause No. 43112)
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