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Columbia Gas sought approval from the PSC to adjust the system charge and distribution usage charges, which are commonly referred to as base rates.  

Unlike most companies, which can change the price of their product/service without outside approval, regulated energy providers—like Columbia Gas—must submit a detailed request to change their base rates to its regulator, the Maryland Public Service Commission (PSC). The request includes evidence to support the increase and demonstrate how it benefits customers. 

The process—referred to as a rate case—must be decided by the PSC. 

Customers had the opportunity to participate in the review process in multiple ways, including through written comments or by attending virtual public hearings. Residential customers were represented throughout the process by the Maryland Office of People's Counsel. 

The rate case review is public. All of the documents that were part of this rate case can be found on the PSC’s website under Case No. 9754.  

Base rates generate the revenue needed to recover the costs to repair, upgrade, and operate Columbia Gas of Maryland’s natural gas delivery system. This system includes 669 miles of pipelines, regulator stations, meters, and other facilities. This charge is separate from natural gas costs, which generally make up about a quarter of the total bill. As a regulated utility, Columbia Gas purchases gas on the wholesale market and, under Maryland law, passes those natural gas costs on to its customers without markup or profit. 

Base rates are made up of a system charge and a usage-based distribution charge (per therm rate). 

• The system charge is a flat rate customers pay on each bill regardless of how much gas Columbia Gas delivers to their home or business.  

• The distribution usage charge is based on how much gas Columbia Gas delivers to their home or business.  

The system charge and the distribution usage charge are the only source of revenue for the recovery of Columbia Gas’ operating costs. All of Columbia Gas’s investments in pipes, meters, and all of its expenses that support safe and reliable gas service – including responding to gas-related emergencies – are recovered through the system charge and distribution usage charge. 

The Gas Commodity Charge, which is separate from base rate charges, recovers the cost of the natural gas used by a customer. Natural gas costs, which make up about a quarter of the total bill, are passed through to customers on a dollar-for-dollar basis. Under Maryland law, utilities cannot profit on the gas commodity charge. 

To continue to provide safe, affordable and reliable natural gas service, we must invest in our system to upgrade aging infrastructure, just as investments are made in bridges, roads and other infrastructure in our cities, towns and communities. 

Since 2008, Columbia Gas has invested more than $304 million in the modernization and expansion of its distribution system in Maryland. Of that amount, approximately $206 million was dedicated to replacing more than 117 miles of aging infrastructure. All know cast iron pipe in our Maryland system was eliminated as of the end of 2020. 

This filing is needed to pay for the Company’s significant investment in Maryland. 

Yes, our system is safe, as evidenced by our ability to address leaks appropriately, as well as through other operational improvements including more frequent leakage surveys and better emergency leak response. Additionally, all known cast iron pipe in our Maryland system was eliminated by the end of 2020. However, we must be a prudent operator and address the systemic replacement of facilities that are approaching the end of their useful life.  

After decades of providing service to our parents and grandparents, some of our pipes must be replaced to ensure continued safe and reliable service. These pipelines served us well, but to continue to provide that safe, affordable and reliable service, we must invest in our system, just as investments are made in bridges, roads and other infrastructure in our cities, towns and communities. 

The decision to ask the PSC to approve a rate adjustment was made after much thoughtful deliberation and analysis. As a public utility, we have a responsibility to maintain the safe and reliable operation of our system, and that includes assessing the financial need to support the replacement of critical system infrastructure and to identify and eliminate additional system risks while maintaining the safe operation of our system across our entire service area.  

There are a range of options and tools available to help customers with their bills, and we encourage them to contact us to help identify the assistance that may best meet their needs. Customers can visit www.ColumbiaGasMD.com/assistance to learn more about our programs.

Infrastructure Upgrades. We are enhancing the safety of our system through our pipeline replacement program. We will continue to invest millions of dollars each year to replace aging distribution pipelines. We remain committed to providing safe, reliable, and efficient natural gas distribution service. 

System Reliability. Upgrades to the system with plastic and cathodically protected steel pipe not only maintain safety, but also provide an upgraded system design ensuring more reliable service during extreme cold temperatures. The new system also provides more flexibility in adding new, high efficiency equipment and allows for the installation of smaller, less expensive interior piping system for customers. 

We take our commitment to our local communities seriously, and we are proud of the nearly 60 full-time employees in western Maryland who comprise the Columbia Gas team. 

Columbia Gas continues to focus on working efficiently. We have taken the following steps to save money and will continue to look for additional ways to make the most cost-effective decisions for our customers: 

• Technological investments, such as investing in Automated Meter Reading technology to reduce the costs associated with reading meters manually.

• Long-term contracts with our pipeline contractors, which ensure affordable and predictable rates for their services. 

• Partnerships with our sister gas distribution companies in Ohio, Pennsylvania, Kentucky, and Virginia, as well as our parent company NiSource, to save money through consolidated, in-house services as well as to gain economies of scale through the ordering of supplies, materials, and contractors. 

At all times, Columbia Gas is committed to providing our low-income customers with the tools, resources, and programs to stay safe and warm in their homes. These programs help customers mitigate the impact of a rate adjustment or financial changes due to economic conditions. 

Budget Payment Plan: Available to all Columbia Gas customers, the Budget Payment Plan allows customers to spread yearly bills over twelve months instead of paying your account balance each month, helping to eliminate high winter bills. The budget season starts in May, but customers may sign up at any time.  

Maryland Energy Assistance Program (MEAP): Columbia Gas serves as a link to federal energy assistance funds which provide help with residential heating costs. These energy grants do not have to be repaid by the customer. Enrollment guidelines, which are revised each new heating season, are based on household size and income. MEAP applications are accepted year-round.  

Utility Service Protection Program (USPP): USPP protects families with low incomes from utility cut-offs and allows MEAP eligible households to enter into a monthly payment program to help stabilize energy bills. MEAP grants are deducted from the estimated annual utility bills, lowering monthly budget payments. For households with back bills, special agreements with Columbia Gas are available to arrange for payment on the balance.  

Heat Share: The Columbia Gas of Maryland Fuel Fund provides energy grants to customers with low incomes for use in offsetting arrears or restoring service to terminated accounts. Heat Share funds are only available to customers who have exhausted all other available energy assistance programs.  

Low Income Usage Reduction Program (LIURP): This weatherization program helps to reduce bills by sealing areas where heat escapes. It assists income-eligible customers who have high gas usage reduce how much energy they use.