Cost to heat homes, businesses likely to go up after Jan. 1

The cost to heat homes and businesses would go up after the first of January under a proposed Columbia Gas rate hike settlement that will be voted on Thursday at the Lexington council meeting.

An average residential customer using 5,500 cubic feet of gas each month would see an increase of $6.09 a month under the proposed settlement. The average commercial customer would see an increase of $24.34 a month.

The proposed settlement between the utility company, the city of Lexington, Attorney General Andy Beshear’s office and groups that represent rate payers would allow Columbia Gas to increase its revenue to $13.4 million, a little more than half of its original proposal to increase revenues by $25.4 million a year.

Susan Straub, a spokeswoman for the city of Lexington, said the settlement — which has been agreed to by all parties — allowed a significantly smaller increase than the one Columbia Gas had proposed.

“The settlement is significantly less than what was requested, and the company is not allowed to file another case before May 2019,” Straub said.

A base customer charge will increase by $1. That charge is added to all bills regardless of usage.

Lisa Smith, a spokeswoman for Columbia Gas, said the additional revenue generated from the rate hike will pay for replacement of older gas mains and other safety enhancements.

“This is about improving safety,” Smith said.

Smith said the agreement requires Columbia Gas to contribute more money to programs that help low-income customers pay heating bills.

Columbia Gas’ last base rate increase was in December 2013. Columbia Gas has 135,000 customers in 30 counties in central and northeast Kentucky.

The proposed settlement must be approved by the Urban County Council. The settlement is on the agenda for Thursday’s council meeting. If approved, as expected, the settlement will be presented to the Public Service Commission at a meeting Nov. 1. The commission will then make a final decision on whether to accept, reject or alter the proposed settlement.

If approved, the proposed rate increase will take effect Dec. 27.

This story was originally published October 26, 2016 at 11:42 AM with the headline "Cost to heat homes, businesses likely to go up after Jan. 1."