NASHVILLE, Tenn. (Legal Newsline) - Tennessee Attorney General Bob Cooper has announced an agreement with Piedmont Natural Gas Company Inc. to reduce the company's pending request for a rate increase by nearly 30 percent.
The agreement was approved at a hearing by the Tennessee Regulatory Authority and could save ratepayers in the state $4.8 million. In September, Piedmont requested that the TRA approve a general rate increase of $16.7 million. The request was the company's first request since 2003 and was a proposed increase to the delivery cost of natural gas.
Cooper's Consumer Advocate and Protection Division reviewed the supporting materials submitted by Piedmont in addition to other financial information it obtained from the company by request. Cooper's office then filed testimony and other documents indicating that Piedmont was entitled to a rate increase of no more than $9.9 million after eight years. This figure was more than 40 percent less than Piedmont's request.
After negotiations, Cooper and Piedmont agreed to an increase of $11.9 million. Meanwhile, the actual cost of natural gas has fallen steadily over the past few quarters due partially to the discovery of new natural gas sources in the United States, Cooper says.
Analysts in the industry expect the gas price drop will offset most if not all of the rate increase in the agreement, Cooper says. This means that even though the rate has increased for the delivery of natural gas, consumers may see a drop in their monthly bill due to the falling cost of natural gas.
"Although we never like to see rates for utilities rise, this is the first increase in eight years to the rates Piedmont charges its customers," Cooper said. "However, for most consumers, any rate increase will be more than offset by the new lower wholesale price for natural gas leading to lower monthly bills and less impact on Tennessean's pocketbook."
The new rates will take effect on March 1.