PUC hearing set on Jefferson Twp. company's 75% rate hike on natural gas

| Wednesday, Oct. 3, 2012, 1:21 a.m.

The Public Utility Commission has scheduled a public hearing on a 75 percent rate increase request from a small Jefferson Township natural gas company.

This is the Herman Riemer Gas Co.'s first rate hike request since 1995, said company spokesman Bob Seibert.

“We've been operating at a loss for the past six years,” he said. “We should have filed for a base rate increase years ago.”

If approved, the monthly bill for the average residential customer would increase by about $46, from $61 to $107.

“It looks like a rather large increase, but it's not that much of a gain for the company,” Seibert said.

Riemer serves about 590 residential customers in Buffalo, Clinton and Jefferson townships.

In July, the commission voted to investigate the request to increase revenues by more than $405,000 or 77 percent.

Under state law, gas companies may neither profit nor lose money on the cost of natural gas. Rate changes are made to handle the cost of distributing the gas.

Each year, the PUC adjusts companies' rates to reflect the rise or fall of natural gas prices. To raise rates beyond that, a company must apply to the PUC.

Many large gas companies file for base rate increases annually, but smaller companies such as Riemer, which has five employees, do so less often due to the time and cost of filing a request with the PUC, Seibert said.

“It will cost well over $16,000 to do this filing, and it's tough to use that money,” he said.

The hearing for the increase is scheduled for Oct. 17 in Freeport Area High School auditorium.

Rate increase hearings are common and are an opportunity for consumers to give testimony. The administrative judge overseeing the hearing issues a recommendation, and the commission makes the final decision.

Jodi Weigand is a staff writer for Trib Total Media. She can be reached at 724-226-4702 or jweigand@tribweb.com.

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