Columbia Gas’s proposed expansion of gas system replacement program should be rejected, OPC filing asserts
BALTIMORE – Columbia Gas of Maryland’s proposal to significantly expand the scope and timing of its costly gas system replacement program should be rejected, the Office of People’s Counsel argued in a filing with the Public Service Commission late last week. Columbia Gas—Maryland’s third largest gas distribution utility, owned by Indiana-based energy conglomerate NiSource—had been on schedule to complete its replacement work at the end of 2026, OPC’s filing said, but its new proposal opens the door to 17 more years of work that would cost customers hundreds of millions of additional dollars.
“Columbia Gas seeks to drastically expand its highly profitable gas infrastructure replacement program to the detriment of customers and in conflict with State efforts to reduce greenhouse gas emissions,” Maryland People’s Counsel David S. Lapp said. “The proposal illustrates the inherent safety issues with using combustible gas to heat Maryland’s buildings and run our appliances—there will always be ways to justify spending more customer dollars to make the system ‘safer.’”
OPC’s filing responded to Columbia Gas’s third five-year plan to take advantage of the financial rewards the legislature provided utilities for replacing gas infrastructure under the Strategic Infrastructure Development and Enhancement (STRIDE) law. To obtain those rewards, the STRIDE law permits utilities to file five-year plans and allows for Commission approval based on whether the plans are “reasonable and prudent.” The utility’s second five-year plan ends this year. Its proposed third five-year plan would cost more than $100 million, at an ultimate customer cost of more than $300 million after including the company’s return on the investment.
Over the course of the past ten years, the Commission has approved bare steel, cast iron, and wrought iron as the priority pipes for replacement in Columbia’s STRIDE programs. The Commission approved Columbia’s first STRIDE plan in 2014 based on the company’s long-term plans to finish that replacement by the end of 2026, which the company is on track to do. This past STRIDE work has contributed to a 56% increase in customer gas costs over five years.
Instead of ending its program, however, Columbia’s new proposal adds another two types of newer pipe as “priority pipe” for replacement. The company is vague about its long-term plans for this newer type of pipe beyond its pending proposal for 2024-2028. OPC’s filing shows that, if the company plans to address the entire population of this newer pipe, its STRIDE program would extend another 17 years, moving the end of its STRIDE program from 2026 to 2043 and adding hundreds of millions in customer costs.
Aside from the significant expansion in program scope, OPC’s disapproval recommendation emphasizes that the company’s proposed plan follows the same approach that has been in place for the previous ten years, with no apparent effort to adapt its new proposal to the changing economic and regulatory policy landscapes affecting the future outlook for the gas industry, particularly the State’s greenhouse gas reduction goals.
“Columbia has nearly accomplished the pipe replacement work that it set out to do a decade ago,” Lapp said. “Now it is moving the goalposts so that it can continue its highly profitable infrastructure investments—despite the substantial risk that those investments will become obsolete as a result of State climate policy and gas’s declining competitiveness against electric heating and appliance options.”
The Maryland Office of People’s Counsel is an independent state agency that represents Maryland’s residential consumers of electric, natural gas, telecommunications, private water and certain transportation matters before the Public Service Commission, federal regulatory agencies and the courts.
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