Let's just wait and see
Seems like everybody picked up on the potential pending agreement between Piedmont Natural Gas and the AG's office during the weekend.
The News & Record put up its own wire story about the issue. But nothing out there yet has had concrete numbers, really, showing what consumers will save. We'll work on that for you.
From interviews I did back when the AG's office first threatened Piedmont with action at the state Supreme Court level, I got the sense that the conservation benefits of any such agreement could be notable. But the average consumer might not notice much of a change in his or her wallet, either way.
Our original story, re-posted after the jump ...
Title: Natural gas rate plan comes under scrutiny
Date: June 1, 2006
Imagine requiring stores to discourage shopping or an ice cream parlor to advocate dieting.
It seems illogical, but for Piedmont Natural Gas, it's a proposition that has landed the company in a tug of war between the Utilities Commission and Attorney General's Office.
As a natural gas provider, Piedmont, which serves the Triad, is policed by the commission, which reviews the company's actions and rate plans.
Last fall, the commission let Piedmont implement an accounting measure that allows it to balance its cash flow better - in hopes that the company would be motivated to tout conservation.
Basically, the company, with the commission's concurrence, can adjust rates slightly to account for consumer demand. For instance, if demand for natural gas is less than expected because of a warm winter, the company can raise its rates to ensure an adequate amount of money continues to come in.
Likewise, if demand is higher, the company can lower its rates to keep from getting too flush with customers' cash.
Advocates argue that this adjustment was designed to stave off red tape and keep Piedmont, a publicly traded utility, on sound financial footing with its shareholders.
"These adjustments have always been made," said Bill Gilmore , a senior operations analyst with the commission's natural gas division. "They just haven't been made in real time."
But enter the state Attorney General's Office. It finds Piedmont's new accounting measure so egregious that it has appealed the commission's decision - a move that might culminate in taking the debate to the state Supreme Court.
The attorney general describes the commission's decision as "erroneous, arbitrary and capricious," according to documents filed with state regulators.
The office won't comment beyond these filings, which focus on two key questions.
One: Is it illegal to change what customers pay now based on past events?
And two: Does the accounting method hurt customers who make efforts to use less gas?
The attorney general's opinion is a resounding "Yes" to both.
Setting customer rates retroactively is illegal in North Carolina, and filings from the attorney general make the case that Piedmont's accounting method breaks the law.
Furthermore, the filings state, the main impact of the adjustment "is to penalize customers for conserving energy. Reductions in consumption will prompt rate increases."
But Piedmont officials disagree.
One major reason the accounting method was approved in the first place was to encourage Piedmont to tout conservation.
In the past, the company hasn't had much reason to conserve. Customers who cut back on gas usage pay less, which means it's harder to make money.
Now that Piedmont can tweak rates every six months to even things out, the company won't lose if its customers start to save energy, said spokesman David Trusty.
"We have no reason not to encourage customers to conserve," he said.
But that could be unfair to consumers who shell out on conservation efforts with visions of saving money on their bills later, the attorney general's office claims.
Piedmont, the commission and the attorney general's office are working to end the fight over customer rates.
"Those discussions with the AG's office are ongoing," Trusty said . "We certainly hope that they result in something that's good for everyone concerned."
If not, the appeal automatically will head to the state Supreme Court.
Contact Michelle Jarboe at 373-7075, or mjarboe@news-record.com
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