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Summit Utilities files request for base rate increase with PSC

Environmental groups focused on climate change want to eliminate natural gas use in buildings, and that includes cooking with gas stoves.
Erano Bundoc
Getty Images/EyeEm
Summit Utilities has requested for a rate increase to the Arkansas Public Service Commission. A gas stove burning in a photo taken in New York.

Summit Utilities Arkansas filed a rate increase request with the Arkansas Public Service Commission Thursday (Jan. 25). The request would increase the monthly bill for the “typical” residential customer by almost 30%.

As part of a previously approved settlement agreement of Summit’s acquisition of CenterPoint Energy’s assets in Arkansas, the PSC required Colorado-based Summit to file the rate case.

Summit’s proposal to the commission is for a $104.7 million base rate increase. Approximately 82% of the requested increase in base rates is to eliminate “the regulatory lag between the establishment of interim rates and the determination, in this proceeding, of the company’s true cost of service.” The remaining 18% of the need is for an increase in base rates outlined by Summit to handle capital investments to improve its distribution system, it said in a filing.

The request also seeks to raise Summit’s authorized revenue Arkansas from $169.474 million to $279.949 million, an increase of 60.53%.

If the request is approved by the PSC, Summit said a typical residential customer using 45 Ccf per month will experience a total monthly bill increase of $18.48 – or around 29.4%. A small commercial customer using 220 Ccf per month could see an approximate $28 increase. Increases in commercial rates range between 0% and 61.1%. A typical rate case lasts 10 months, the company said, and rates will not increase until the PSC approves a rate change.

Summit said it would also use the increase in revenue for:

  • Efficient response times to customer service calls;
  • 24-hour, seven days per week, 365 days per year emergency dispatch and response;
  • Investments in new, smart technologies to monitor, inspect, and maintain the integrity of the pipeline system; and
  • Staff, customer service and operations teams.

“Our existing rates have been in place since our acquisition in 2022, and as with most companies across Arkansas, we have experienced rising costs. Our proposed rate increase more accurately reflects our cost of business and is similar to rate requests other utilities are asking for in Arkansas. It is largely driven by inflation, economic conditions, and capital investments in our system, so we can provide you with safe and reliable gas service that’s always there when you need it,” said Fred Kirkwood, Summit Utilities SVP & chief customer cxperience officer.
Arkansas Attorney General Tim Griffin said his office will review the Summit filing.

“Rate changes are determined by the Arkansas Public Service Commission. However, I am reviewing Summit’s filing to protect Arkansas ratepayers from excessive utility rates,” Griffin said in a statement provided to Talk Business & Politics.

Centennial, Colo.-based Summit Utilities acquired Fort Smith-based AOG in early 2017, and owns natural gas distribution and transmission subsidiaries in Arkansas, Colorado, Maine, Missouri, Oklahoma, and Texas. In early 2022 Summit completed the acquisition of gas distribution assets of Houston-based CenterPoint Energy Inc. that provide energy to 525,000 customers in Oklahoma, Arkansas and Texas, and include about 17,000 miles of gas main pipeline in the three states.

Overall, Summit entities have approximately 625,000 customers and operate more than 23,400 miles of pipeline. AOG sells natural gas to approximately 60,000 residential, commercial, industrial, and agricultural customers in Arkansas and Oklahoma.

Roby Brock is the Editor-in-Chief and Host of Talk Business & Politics.