Why is my Dominion Energy gas bill going up? Here's the answer | Betty Lin-Fisher
Your next monthly Dominion Energy natural gas bill will be $1.93 higher, but it doesn’t have anything to do with the current cost of gas.
Dominion Energy Ohio is in the midst of a massive, 25-year replacement of its aging pipelines. Ohio law allows regulated utilities to recoup costs the utility spends on infrastructure with some oversight from the Public Utilities Commission of Ohio, so that means customers pay for it.
What is this Dominion pipeline replacement project?
In total, Dominion is replacing more than 5,500 miles across Northeast Ohio and Western Ohio. In the Akron area, Dominion serves parts of Summit, Stark, Portage and Medina counties.
The project was first approved in a rate case in 2008. Collection of what’s called the Pipeline Infrastructure Replacement Cost (PIR), which is included among other charges in the “Total Monthly Charge” on your Dominion bill, began being collected in 2010.
The costs to consumers are always a year behind the actual costs incurred by Dominion, which has to turn in documentation to be audited by the PUCO regulators.
By the end of 2022, Dominion had replaced nearly 2,335 miles of pipeline, or about 42% of the project, PUCO staff said in a report filed about the case in March.
How much does it cost?
The fee for residential customers started at 72 cents a month in January 2010 and was designed to incrementally increase to spread out over the years. Effective with bills after May 12, the PIR charge is now $18.74. Last year’s rate was $16.81. Fees for commercial accounts are different and higher.
Dominion must get approval every five years to continue the program, and it was last approved in April 2022. Each year, Dominion must turn in its costs for the previous year; after the PUCO staff does an audit, the new fee is approved for a change in May.
Will the pipeline replacement fee last for 25 years?
It will likely last longer. While the original project length by Dominion was set for 25 years from 2008 (and the first fees were collected in 2010), "it is likely that the PIR program will require more than 25 years to complete," said Ella Hochstetler, director of regulatory and pricing for Dominion in an email.
"The 25-year target was established in 2008 when the known mileage target was around 4,120 miles, but in 2011, around 1,450 miles of pipe were added to the target," she wrote. "(Dominion) has been using best efforts to install as much pipeline as possible under PUCO-approved rate caps. Installations have been in line with the pace projected in 2008. But the expansion of the target pipeline population will likely require additional time to complete."
Why are the monthly services charges so high?
All customers pay a fixed, basic monthly charge — regardless of usage volume. That cost is currently $42.43. The bill for May includes some increases; the biggest increase is for the pipeline replacement program.
I have heard complaints for years about the high fixed monthly service charges that all customers have to pay regardless of their gas usage. So even if you use very little natural gas in the summer, you still have to pay the $42.43.
Years ago — and before the pipeline replacement program costs began to increase — the monthly service charge was much smaller and many of the other charges, called riders, were instead added to the delivery charge. That’s a separate fee per mcf charged to deliver the gas to your home, regardless of your provider. That cost is currently $1.05/mcf. That delivery fee used to be higher, but Dominion got approval to move around the charges to the fixed monthly charge instead of the delivery fee.
The monthly charge of $42.43 is broken down into these charges:
A basic service charge of $17.58, which covers the fixed costs of delivering gas to their homes.
A Pipeline Infrastructure Replacement (PIR) cost recovery charge of $18.74.
A Capital Expenditure Program (CEP) rider of $6.07. The PUCO approved this rider December 30, 2020, which enables the company to recover costs associated with certain non-PIR and non-AMR capital investment.
An Infrastructure Development rider of 6 cents.
A credit of 2 cents for Automated Meter Reading program cost recovery charge. Effective May 12, this moves from a 1-cent credit to a 2-cent credit. This program "allowed more frequent meter readings, increased customer convenience for those with inside meters, and reduced annual labor costs," Hochstetler said. Dominion completed the program several years ago, and "the rider has become a credit because operational cost savings exceed the costs of installation," she said.
For reference, if you like knowing all the details of each month's Dominion bills and watching the Standard Choice Offer price, watch for monthly updates at this website, generally around mid-month: www.dominionenergy.com/ohio/rates-and-tariffs/rate-schedules. Choose "Residential GSS-R" on the first box under "General Sales Service." The SCO is also listed on the top of the PUCO's Apples to Apples chart at www.energychoice.ohio.gov I also update my online Utility Guide each month at www.tinyurl.com/UtilityGuide
What about natural gas prices?
The SCO and the price for Dominion customers who have not chosen their own provider or who are not in a community aggregation is $2.51 per thousand cubic feet (mcf) rounded up to the nearest penny. The rate, which changes monthly and is based on a state-approved formula, is effective May 12. It was $2.38/mcf in April.
If you missed recent columns with natural gas and electricity advice, go to my online utility guide. I am currently recommending the SCO for most people, unless your community aggregation price or your own contract price is cheaper. For electricity, most communities are in an aggregation that has a good price and will be better than public rates. You want to switch to that before default rates for Ohio Edison double in June for those who don’t choose a provider.
Beacon Journal staff reporter Betty Lin-Fisher can be reached at 330-996-3724 or blinfisher@thebeaconjournal.com. Follow her @blinfisherABJ on Twitter or www.facebook.com/BettyLinFisherABJ
This article originally appeared on Akron Beacon Journal: Why is my Dominion Energy gas bill going up? Betty Lin-Fisher explains
