State Amendment Would Enable Customers to be Charged for Old Gas Site Clean-Ups

A century-old law protecting natural gas consumers from being overcharged for utility service may be weakened as part of an amendment to the state’s budget bill proposed in the Ohio Senate, according to the Ohio Consumers’ Counsel (OCC). At stake for consumers are tens to hundreds of millions of dollars in costs for long-closed gas plant sites (some dating to the early 1800’s) that gas companies want to clean up at their customers’ expense. There are an estimated 90 former manufactured gas plant sites throughout Ohio. (See map).

The Governing Board of the Office of the Ohio Consumers’ Counsel (whose nine members are appointed by the Ohio Attorney General) today adopted a resolution in opposition to the amendment. The resolution states that the Board, “opposes efforts to weaken the ‘used and useful’ standard and other standards designed to fairly balance the interests of consumers and utilities.”

Current Ohio law allows utilities to collect costs to maintain their facilities only when they are “used and useful” for the benefit of their customers. The OCC says the amendment to the statute would reduce that legal hurdle by allowing natural gas utilities to charge for clean-up costs as long as a former plant site  “was” used to provide utility service.  Another problem is that the amendment would burden smaller usage customers (such as residential and small commercial) with relatively more of the charges than larger usage industrial customers.

“Since 1911, an Ohio law has balanced the interests of consumers and utilities for setting rates,” said Consumers’ Counsel Bruce Weston.  “The natural gas utilities want to tip the scale in their favor by changing the law and charging customers for millions and millions of dollars in clean-up costs.  That is a very bad idea that should be rejected by the Ohio Senate.”

Recently, OCC recommended to the PUCO, under current law, that it reject the request by Duke Energy Ohio to collect $62.8 million related to the clean-up of two manufactured gas plant sites. In that case, the PUCO Staff recommended that Duke’s request be reduced to just $6.4 million. The PUCO Staff based its recommendation on the “used and useful” standard in the law that the amendment would change. The Duke rate case is awaiting a decision by the PUCO.

To view the OCC Governing Board resolution, visit the OCC website, www.pickocc.org.

For more information about the ongoing Duke case, visit the official case docket at: 12-1685-GA-AIR el al.