Mountaineer Gas workers uncover buried service lines at the corner of Charleston’s Washington and Florida streets amid an extended gas outage on Nov. 13, 2023.Â
Mountaineer Gas workers uncover buried service lines at the corner of Charleston’s Washington and Florida streets amid an extended gas outage on Nov. 13, 2023.Â
KENNY KEMP | Gazette-Mail file photo
Mountaineer Gas has proposed a double-digit rate increase for its roughly 218,000 customers spanning 50 of West Virginia’s 55 counties.
The Charleston-based utility last week proposed changes in rates and charges that would increase company revenue roughly $44.5 million annually effective Nov. 1 — a 39.2% hike.
Under that proposal, average monthly bills would increase:
$12.51 (15.6%) for residential
$62.49 (19.8%) for commercial
$440 (9.2%) for industrial
$1,479 (28.1%) for resale customers, which include Canaan Valley Gas Company, Cardinal Natural Gas Company, Consumers Gas Utility Company, Hope Gas, Inc., Megan Oil and Gas Company, and City of Philippi.
Mountaineer Gas proposed those changes in a filing seeking to update its purchased gas cost adjustment rate, which is based on the price that gas utilities pay their suppliers for gas. The purchased gas cost adjustment doesn’t include profit for the utility.
The proposed rate includes a residential pipeline demand charge and increased commodity charges, Mountaineer Gas said in the filing.
In a separate filing last week, Mountaineer Gas requested PSC approval of an infrastructure upgrade program for 2026 that would result in rate hikes effective Jan. 1, 2026, that include:
$1.55 (1.9%) for residential
$4.12 (1.4%) for nonlarge commercial
$297.22 (0.3%) for industrial
$44.28 (0.6%) for wholesale
In its application, Mountaineer Gas projected a $77 million capital investment for 2026 that would cover plant asset replacements and improvements, including for mains, service lines, measurement and regulator stations.
Under Mountaineer Gas’ proposal, its infrastructure upgrade program revenues would increase roughly $5.2 million for program investments made from 2023 to 2026.
Mountaineer Gas' rate increase plans are poised to add to West Virginians’ rate hike fatigue - especially since they've been accompanied by other substantial utility rate hikes.Â
The utility’s average residential costs increased 27.9% from 2020 to 2024, according to PSC data. Hope Gas’ average residential costs rose 87.3% in the same time span.
In the same time frame, residential costs for Appalachian Power and Wheeling Power customers climbed 32.3%, while costs for Mon Power and Potomac Edison customers grew roughly 16%.
Prior to a $24.1 million rate increase for West Virginia American Water in February 2024, the average monthly West Virginia American Water bill for 3,100 gallons had increased 66% via nine rate increases, from $39.74 to $65.99, according to data from the PSC’s Consumer Advocate Division.
In an annual report to the PSC, Mountaineer Gas reported a roughly $14.3 million fiscal year 2024 net income that was 25.4% higher than its fiscal year 2023 net income of approximately $11.4 million.
“Enough is enough,†Timothy Prichard of Huntington said in a public comment filed Sunday with the PSC asking it to deny Mountaineer Gas’ proposals. “I live on a fixed income, and these constant rate increases by these utilities are killing me.â€
Testimony: System needs 'significant improvement'
Mountaineer Gas’ purchased gas cost adjustment rate case filing listed a lost-and-unaccounted-for gas percentage of 4% nearly double the 2020 national reported operator average of 2.1% recorded by the federal Pipeline and Hazardous Materials Safety Administration.
In the filing, Mountaineer Gas said it would “continue to focus its efforts to reduce gas losses through established preventive maintenance programs and leak surveys,†facing a challenge of serving farm tap customers and distribution system customers drawing from declining conventional production and gathering systems.
Mountaineer Gas said that in some cases, it’s required to take over “aged†pipelines to continue service, leading to additional time and effort to control lost-and-unaccounted-for gas as well as overall gas costs.
Mountaineer Gas’ actual infrastructure upgrade program costs amounted to just under $9 million in 2024 compared with just below $8.7 million in revenues collected through the program, called the Infrastructure Replacement and Expansion Program, resulting in an under-recovery of $278,973, the company said.
In testimony filed last week, Mountaineer Gas vice president Scott Klemm indicated Infrastructure Replacement and Expansive Program costs include an incremental return on rate base investments, income taxes, depreciation and property taxes, as authorized by the PSC.
Timothy Westfall, Mountaineer Gas vice president of gas supply and technical services, testified the company’s distribution system contains some 6,200 miles of pipeline and 220,000 service connections.
Westfall reported the company is still burdened by aging infrastructure despite what he said were positive results provided by the infrastructure upgrade program.
“The IREP program is a long-term solution that will require continuous investment, monitoring, and modification,†Westfall said in his written testimony.
The overall condition of Mountaineer distribution system “still requires significant improvement,†Westfall testified.
Westfall said the company will “continue to operate a significant footage of†leakage-prone bare steel pipeline in its system, even after accelerating what had been a 75-year plan into a 20-to-30-year goal. Mountaineer Gas concluded a 75-year plan wasn’t suitable to sustain a safe system given the current footage of bare steel and its vintage ranging from the late 1800s to the 1960s, Westfall said.
The company has allocated roughly $64.8 million to replace and upgrade mains in its 2026 plan, Westfall noted.
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