Case 16-G-0257: National Fuel Gas Distrubution Corporation - Proposed Rate Increase

In April 2016, National Fuel Gas Distribution Corporation (NFG) requested that the New York State Public Service Commission approve a proposed increase in its gas delivery service rates. NFG serves approximately 527,000 customers in parts of ten counties in Western New York.

Upon receipt of the rate filing, Department of Public Service (DPS) Staff began an analysis of the Company’s request to evaluate whether – or to what extent – a rate increase is justified. DPS represents the public interest in rate proceedings and evaluates such requests with the goal of ensuring safe and reliable service at just and reasonable rates.

Review of the NFG filing is also underway by other parties to the proceeding.

Public Statement Hearings

The Commission is seeking comment on the proposed increase to gas service rates. An Administrative Law Judge will preside over the gathering of public comments and all evidence relating to the rate request. The comments made at the hearings will become part of the formal record in these proceedings and will be presented to the Commission for consideration. Under New York State Law, the Commission must consider a utility’s proposal and may adopt or reject it in whole or in part, or modify it by adopting changes not proposed by the Company, but by participating parties, the general public or the Commission.

Interested members of the public are invited to attend the public statement hearings and provide comments regarding the proposal. The hearings will be proceeded by an information session where an NFG representative will describe the Company’s filing and DPS Staff will explain the rate case process and how individuals can participate. It is not necessary to make an appointment in advance or present written material in order to speak at the hearings.

Disabled persons requiring special accommodations may place a collect call to the DPS's Human Resources Management Office at 518-474-2520. TDD users may request a sign language interpreter by placing a call through the New York Relay Service at 711 to reach the Human Resource Office at the previously mentioned number. If you have difficulty understanding English, please call DPS at 1-800-342-3377 for free language assistance services.

    On April 28, 2016, NFG filed for new gas rates to be effective beginning April 1, 2017. This is the first rate increase sought by NFG since 2007. According to the filing, the Company’s proposal will enable the NFG to provide safe and reliable gas service through continued modernization of its pipeline infrastructure and customer information technology systems. NFG asserts that the rate request will also allow the Company to provide enhanced low income customer programs and continue economic area development and possible gas expansion initiatives.
    Proposed Rates:

    A gas bill consists of two components: delivery and supply. The delivery component recovers the cost to transport the gas to customers throughout the utility’s gas delivery system. The delivery component of the gas bill is regulated by the Commission. The supply component of the gas bill recovers the cost of the gas commodity itself. The cost of the gas commodity is determined by the competitive market place and is not set by the Commission or the utility.

    Under NFG’s proposal, gas delivery rates would be modified to increase the Company’s annual gas delivery revenues by approximately $41.7 million (a 15.27% delivery revenue increase). If the proposed rate request were to be approved, the Company estimates that the annualized monthly bill for gas service to a residential heating customer using 83 therms per month will increase by approximately $5.75 (or 7.2% on the total bill). The projected residential heating customer’s total bill impact is based on estimated supply costs.

    Rate Case Components:

    • System Modernization: Included in NFG’s proposal is funding to modernize pipeline infrastructure, including implementing a cost recovery mechanism that will permit the Company to accelerate its replacement of aging pipes. The proposal calls for increasing the current target of 95 miles of main replaced annually to a target of 110 miles in 2018. The Company also plans to replace its aging customer information system with current technology to increase reliability and provide customers with the most up to date and accurate information.
    • Low Income Programs: NFG proposes to enhance its low income programs, including expanding its HEAP Residential Assistance Service program and waiving initial reconnection fees for eligible customers.
    • Gas Expansion: As part of the rate request, the Company will continue to seek opportunities to expand its service to new customers and new areas.

The full text of the rate case may be viewed online at DPS’s website. From the homepage, click on “Search,” and enter the case number (16-G-0257) in the “Search by Case Number” field.

Some individuals or groups participate in rate cases by becoming a party in the case. Instructions on how to request party status in the NFG case may be found in the Commission’s Notice of Technical and Procedural Conference issued on June 2, 2016. The notice is available online at DPS’s website. From the homepage, click on “Search,” and enter the case number (16-G-0257) in the “Search by Case Number” field.

There are also several other ways to participate in the rate case process, including:

    • Join the Service List: Interested persons who wish to monitor the proceedings of a particular case can do so without the formal commitment to become a party to the proceeding. The persons who subscribe to the service list of a case will receive an e-mail with a direct link to the documents issued by the Commission, such as orders, notices, and rulings. Persons unable or unwilling to receive such electronic notification will receive hard copies of Commission-issued documents by regular mail.

      To register online, click on the “Subscribe to Service List” link at the top of the dedicated page for Case 16-E-0257. A “Service List and Mail Service List Request Form” can be downloaded from the site and the completed form sent by e-mail to Hon. Kathleen H. Burgess, Secretary at or by mail to: Secretary, Public Service Commission, Three Empire State Plaza, Albany, NY 12223-1350.
    • Monitor the Case on the Commission Website: Interested persons who choose not to sign up to receive e-mail notifications can view our website at their convenience to check on the status of a case. All documents filed by parties, correspondence, hearing transcripts, and Commission issued documents in a given case are posted on the website. All comments submitted by the public are posted under the ‘public comments’ tab for the case.
    • Provide Comments: There are opportunities to attend public outreach events to learn about the proposals and provide comments. All comments can be submitted at the public statement hearings held on June 28 or 29, 2016 or through the methods below:
      Via the Department’s Website: Comments may be entered directly into Case 16-G-0257 by clicking here than enter your comments in the “Post Comments” section located at the top of the page.

        · Via Mail/E-Mail: Submit comments electronically to Kathleen H. Burgess, Secretary, at or by mail or delivery to Secretary Burgess at the Department of Public Service, Three Empire State Plaza, Albany, New York 12223-1350. Comments delivered in these manners should reference “National Fuel Distribution Corp. Rate Case” (16-G-0257).

        · Via Toll-Free Opinion Line: Individuals may choose to submit comments by calling the Commission’s toll-free Opinion Line at 1-800-335-2120. This line is set up to receive in-state calls 24-hours a day. Callers should press “1” to leave comments about Case 16-G-0257 “National Fuel Gas Distribution Corp.” Comments received via the Opinion Line are not transcribed, but a summary is provided to the Commission for their consideration.

      Comments submitted via these alternative means will be accepted at any point while this proceeding is pending, but are requested by October 31, 2016 to ensure full consideration. All comments will become part of the record considered by the Commission.

      You can click on a printable version of this factsheet below:

      16-G-0257 NFG Rate Case factsheet final 6-10-16.pdf16-G-0257 NFG Rate Case factsheet final 6-10-16.pdf

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