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NW Natural Files For First General Rate Increase In 9 Years

Stocks in this article: NWN

Northwest Natural Gas Company, dba NW Natural (NYSE:NWN), today announced that for the first time since 2002, the company has filed for a general rate increase with the Public Utility Commission of Oregon (OPUC).

If approved as filed, the request would result in an overall revenue increase of about 6 percent, or $43.7 million. Under this proposal, a residential customer using 54 therms per month would see an average monthly bill increase of about $5 (or 8 percent). A commercial customer using 221 therms a month would see an average monthly bill increase of about $13 (or 6 percent).

The request addresses higher costs associated with maintaining and operating the company’s pipeline system and serving customers, as well as employee pension and other benefit costs. The request will not affect customer bills this winter.

“Over the last nine years, we’ve streamlined our operations and kept increases in our costs to serve customers well below the inflation rate – and well below most of our peers,” said Gregg Kantor, NW Natural President and CEO. “Because of our cost control efforts and lower natural gas prices, even with this rate increase in place customers will be paying less for gas service than they did in 2005. We have managed our business well and done all we can to delay this filing.”

The proposed increase supports the following operational areas:

  • Pipeline and system safety. A portion of customer rates pay for inspections; maintenance and repairs; incident response staff; and training to keep the company’s system as safe as possible. NW Natural has been aggressive in these areas and continues to add necessary personnel to meet or exceed all federal safety regulations.
  • Shorter service windows. When customers call to request a service appointment, the company has been able to tell them what day – but not what time – the technician will arrive. By hiring more technicians, NW Natural can reduce the appointment window time to morning or afternoon.

Separate from the revenue increase request, the company is also proposing a mechanism to address clean-up expenses related to legacy manufactured gas plant operations. The proposal would collect in rates only those costs that insurance does not cover and would do so over many years to lessen the impact on customer bills. This mechanism could result in an additional 1 to 3 percent increase, depending on insurance recovery collections and clean-up project costs that occur between now and the date new rates take effect.

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