Just got notification that EPB in Chattanooga is changing their natural gas rate structure effective October 1st. They're eliminating the current declining block structure and moving to a straight volumetric rate with separate customer charge. This is going to significantly impact larger commercial users - some of my clients could see 15-20% increases. Has anyone else gotten similar notices from their gas utilities? Seems like there's a trend toward simplifying rate structures but obviously at a cost to high-volume customers.
EPB natural gas rate schedule changes - heads up
Brenda, Entergy Gas down here in New Orleans made similar changes about 8 months ago. They called it 'rate modernization' but it was really just a way to shift costs to commercial customers. The declining blocks were one of the few advantages larger users had. We helped several clients file formal comments during their rate case, but the commission approved it anyway. I'd suggest getting your clients organized to file comments if there's still time in EPB's proceeding.
This is happening everywhere. MLGW here in Memphis restructured their gas rates two years ago with the same result. What we found helpful was calculating the bill impact for each client under both rate structures and then working with them to optimize usage patterns where possible. Some facilities were able to shift certain processes to minimize the impact. Not a perfect solution but better than just accepting the higher costs.
Same thing happened with Louisville Gas & Electric last year. James is right about optimizing usage patterns. We also had success getting some clients reclassified to different rate schedules that weren't as severely impacted. Worth reviewing all the available rate options - sometimes there are industrial or special contract rates that might work better under the new structure.
Thanks for all the suggestions. I've been going through EPB's filing and there are definitely some alternative rate schedules that might work for larger customers. The industrial interruptible rate looks promising for clients who have backup fuel capability. Going to run some scenarios this week and see if we can get ahead of this before October.