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Ohio Consumers’ Counsel opposes Columbia plan to charge all customers to replace leaking natural gas risers

COLUMBUS, Ohio – June 7, 2007 – The Office of the Ohio Consumers’ Counsel (OCC), the residential utility consumer advocate, opposes a plan proposed by Columbia Gas of Ohio to charge all its customers to replace the natural gas risers that are prone to leaks. The OCC voiced its opposition through a filing made late Wednesday at the Public Utilities Commission of Ohio (PUCO).

Columbia anticipates that it would need to replace approximately 400,000 natural gas risers at a cost around $200 million to replace the targeted risers, or approximately $500 per house. To help defray the cost to the affected households, Columbia has requested the PUCO allow it to charge all 1.3 million customers $2 a month until all its costs have been recovered. The replacement process would take approximately three years, according to the company, but it does not specify when the monthly charge could end.

As part of the plan, Columbia also outlines a process that would permit it to assume responsibility for future maintenance, repair and replacement of the service line. In addition, Columbia plans to assume ownership of any new risers and any service lines constructed or installed as these current items are replaced.

“OCC believes that these replacements need to be done as a priority in order to ensure customer safety. However, we do not support all customers being charged especially if they do not have a riser that needs attention,” said Janine Migden-Ostrander, Consumers’ Counsel. “The OCC continues to maintain that consumers should not have to bear all of the costs of repairing or replacing faulty natural gas risers.”

The OCC believes that Columbia’s plan should be denied because:

Under U.S. Department of Transportation rules and regulations, customer owned service lines, including the natural gas riser, are considered pipelines. This means that Columbia is responsible for inspecting these lines for leaks and ensuring that they are safe for use. In a separate, but related case, Columbia did admit that it was responsible for inspecting “non-welded joints,” or pipeline connections that are not welded, such as the joints in the affected risers and those that connect the riser to the service line and meter.
Columbia has requested to raise its rates under a procedure that is prohibited. The OCC contends that the company should file for the increase in a rate case that would allow both public and PUCO scrutiny.

The OCC filed recommendations in the PUCO’s natural gas riser investigation in February 2007 on how the PUCO should proceed taking into consideration consumers’ best interests. In addition, the OCC opposed a request by Columbia in early May to recover costs already incurred and defer any future costs related to the investigation. The PUCO has yet to make a decision in either proceeding.

About the Office of the Ohio Consumers' Counsel

The Office of the Ohio Consumers' Counsel (OCC), the residential utility consumer advocate, represents the interests of 4.5 million households in proceedings before state and federal regulators and in the courts. The state agency also educates consumers about electric, natural gas, telephone and water issues and resolves complaints from individuals. To receive utility information, brochures, schedule a presentation or file a utility complaint, residential consumers may call 1-877-PICKOCC (1-877-742-5622) toll free in Ohio or visit the OCC Web site at www.pickocc.org.