Columbia Gas of Pennsylvania Customers Save $4.5 Million Thanks to Weather Normalization Program This Winter

[rf...@nisource.com]

For Immediate Release
March 7, 2014
Contact: Rachel Ford
724-416-6356
rf...@nisource.com

COLUMBIA GAS OF PENNSYLVANIA CUSTOMERS SAVE $4.5 MILLION THANKS TO WEATHER NORMALIZATION PROGRAM THIS WINTER

CANONSBURG, PA – While Pennsylvanians were experiencing one of the coldest winters in recent memory, Columbia Gas of Pennsylvania, Inc., was helping its residential customers reduce their natural gas bills by $4.5 million since October.

As approved by the Pennsylvania Public Utility Commission (PUC) and with input from the Pennsylvania Office of Consumer Advocate, Columbia adopted a new rate structure called a “Weather Normalization Adjustment” (WNA) at the beginning of this heating season. The WNA reduces the distribution portion of customer bills during extreme cold temperatures. The distribution portion of the customer bill is the portion paid to Columbia Gas for the service of delivering gas to the customer’s residence through its pipelines.

“The Commission’s approval could not have come at a better time,” said Columbia Gas of Pennsylvania President Mark Kempic. “Thanks to the WNA, Columbia customers saved money during a period of time when extreme temperatures resulted in increased energy consumption and higher than normal utility bills.”

So far this heating season average temperatures were 11 percent colder than normal, leading to an aggregate reduction of $4.5 million dollars on customers’ bills. Columbia Gas is one of only two gas utilities in the Commonwealth having a Weather Normalization Adjustment for their residential customers.

When temperatures are colder than normal by more than 5 percent from October through May, customers receive a credit on the distribution portion of their bill. This adjustment reduces the distribution potion of the customer’s bill to the amount it would have been if temperatures were normal. Likewise, when temperatures are warmer than normal by more than 5 percent, customers receive a debit on their bill.

Whether a customer receives their gas supply from a licensed marketer under Columbia’s Choice program, or whether a customer takes their supply from Columbia, the adjustment for weather does not affect the “Gas Supply Charges,” or natural gas commodity costs, that make up approximately half of a customer’s bill.  For customers who have opted to have their gas commodity supplied by a marketer under the Choice program, the contracted supply rate is not affected by the WNA.  Likewise, for customers who take supply from Columbia, the Commission-approved rate for that supply is not affected either.  Under Pennsylvania Law and as a regulated utility, Columbia does not mark up or profit on the natural gas commodity costs that represent the actual cost of the gas used by appliances. The price of the natural gas commodity is passed along to customers dollar for dollar.

The WNA billing method more closely reflects the manner in which Columbia Gas incurs costs to deliver gas to customers. Maintaining pipes has a fixed cost regardless of how much gas passes through them, and utilizing weather normalization ensures that customers do not pay more or less than normal because of variations in weather.

"The Weather Normalization Adjustment makes a lot of sense because it doesn't cost Columbia Gas any more to deliver gas in the winter than it does in the summer," said Columbia's Director of Rates and Regulatory Affairs Nancy Krajovic. "As a gas distribution company, Columbia's sole business is investing in pipe to deliver gas to its customers safely and efficiently. The cost of maintaining, repairing, and replacing the pipe is the same regardless of whether customers use a lot of gas or very little. Frankly, it would even make sense to charge customers a flat rate each month for their distribution service."

While this new rate structure helps customers manage their bills, Columbia would also like to remind its customers that it has many programs available to assist with energy bills and reduce energy usage. The utility offers payment options to customers with limited or low income, customers who are facing special circumstances, or those who need to re-establish their gas service. For more information or to see if they qualify, customers should call Columbia Gas of Pennsylvania at 1-888-460-4332.

For more information, please visit our website at www.ColumbiaGasPA.com.

About Columbia Gas of Pennsylvania
Columbia Gas of Pennsylvania safely delivers clean and efficient natural gas to approximately 417,000 customers in 26 counties. With local headquarters in Canonsburg, Pa., the company is one of the seven energy distribution companies of NiSource Inc. (NYSE: NI). NiSource companies deliver energy to approximately 3.8 million customers located within the high-demand energy corridor stretching from the Gulf Coast through the Midwest to New England. More information about Columbia Gas of Pennsylvania is available at www.ColumbiaGasPA.com.