PUCO approves Vectren distribution rate case

COLUMBUS – The Public Utilities Commission of Ohio approved a settlement agreement that resolves Vectren Energy Delivery of Ohio’s distribution rate case, infrastructure replacement program and capital expenditure program.

The commission approved an agreement that will allow Vectren to increase its annual distribution rates by $22 million. The company initially sought an increase of $34 million.

Distribution rates also will reflect the lowered federal income tax rate as a result of the Tax Cuts and Jobs Act of 2017. The agreement establishes a method for Vectren to return to customers the excess rates collected by the utility since the TJCA went into effect in January 2018.

The company will continue its infrastructure replacement program to replace aging pipelines throughout its service territory through 2023. Cost caps will limit the extent of a customer’s monthly bill increase during each year of the program. Residential customers will experience an increase in their monthly bill by $2.50 or less each year.

Vectren will begin collecting deferred expenses related to its statutorily authorized capital expenditure program through the CEP rider. Cost caps will limit the extent of a customer’s monthly bill increase to $1.50.

Vectren also is authorized to continue its conservation and energy efficiency program and will commit $75,000 of shareholder funds to the city of Dayton for economic development purposes.

As a result of the decisions, an average residential customer will see an increase of approximately $6.99 in their monthly bill. However, the commission also noted that a pending proceeding related to a rate reduction as a result of the Tax Cuts and Jobs Act of 2017 will help offset this rate increase. Expected reductions are approximately $82.6 million prior to tax adjustments.

On Jan. 10, 2018, the commission ordered an investigation to study the effects of the TCJA on PUCO-regulated utilities and how best to pass on the benefits to customers and directed utilities to set aside money in excess of the reduced tax rate to later be returned to customers.

On March 30, 2018, Vectren filed an application to increase its distribution rates and an application to continue its integrity management program.

On April 13, 2018, Vectren filed an application to continue its capital expenditure program.

On Oct. 1, 2018, PUCO staff filed a summary of its investigation of the company’s applications.

The PUCO held three public hearings in November 2018 to collect testimony from the public regarding Vectren’s applications. Hearings were held in Dayton, Washington Court House and Sidney.

On Jan. 4, 2019, a stipulation and recommendations, or settlement agreement, was signed by Vectren, PUCO staff, the city of Dayton, Federal Executive Agencies, Interstate Gas Supply and Retail Energy Supply Association.

On May 1, 2019, Vectren filed an application to adjust its distribution replacement rider to reflect investments made during 2018.

A copy of the opinion and order is available online at www.PUCO.ohio.gov. Click on the link to Docketing Information System and search for case number 18-298-GA-AIR.