PSC approves rate hike for gas utility

PSC denied the company’s proposed Tax Adjustment Factor Rider

FRANKFORT, Ky. (KT) – The Kentucky Public Service Commission issued a final order on Friday in the rate case filing of Atmos Energy Corporation, authorizing a $2.6 million, or 1.51% increase, in base rates for their natural gas customers.

Atmos Energy Corporation provides natural gas service to approximately three million households and businesses in eight states, and has six gas utility operating divisions, including one that serves Kentucky. Their regulated gas distribution operation in Kentucky serves about 176,000 residential, commercial, and industrial customers in central and western Kentucky.

Atmos Kentucky’s application requested an overall rate increase of 3.8% or approximately $6.5 million in annual revenue, and 9.6% for the average residential customer.  But during the process the request was reduced to $4.9 million or a 2.8% increase.

The Commission conducted two public comment meetings on Dec. 6, 2021.  Originally, a three-day hearing was scheduled for December 14-16, 2021; however, that was canceled due to an emergency created by tornadoes that struck the utility’s service territory on December 10-11.

Approval was given to a 9.23% Return on Equity for Atmos Kentucky’s base rates and a 9.13 percent ROE for its Pipeline Replacement Program.  Friday’s order authorizes a $19.30 per month residential service charge, denying the original requested increase of $24.29 per month. Authorized distribution charges are $1.5483 per Mcf for the first 300 Mcf, $1.0762 for the next 14,700 Mcf, and $0.8888 for usage over 15,000 Mcf.

However, the PSC denied the company’s proposed Tax Adjustment Factor Rider and reduced several nonrecurring customer charges to ensure these charges only reflect the cost to conduct specific services.  Atmos Kentucky was also directed to discontinue the residential late payment fee and the charge it imposes on customers who request temporary service disconnection.

The Commission will open a separate proceeding to investigate Atmos Kentucky’s imposition of some nonrecurring charges that are not included in the company’s tariff, as required by PSC governing statutes and regulations.