Kentucky Public Service Commission Approves Columbia Gas of Kentucky's Revised Gas Cost Adjustment Rates

Strategic Insights -

The Kentucky Public Service Commission (PSC) has approved revised gas cost adjustment (GCA) rates for Columbia Gas of Kentucky, Inc. (Columbia Kentucky) in a recent order. The revised GCA rates, which are set to take effect on August 28, 2025, reflect a decrease in the expected gas cost per million cubic feet (Mcf) from $9.6340 to $6.5809. This change aims to pass on the decreased gas costs to customers.

Key Takeaways:

  • The PSC's standard of review for GCA rates is based on KRS 278.274(1), which requires the Commission to review the utility's gas purchasing practices and disallow any costs or rates deemed to result from imprudent purchasing practices.
  • Columbia Kentucky's revised GCA report includes an Expected Gas Cost (EGC) of $6.5044 per Mcf, which is a decrease of $2.6005 per Mcf from its previous EGC.
  • The revised GCA rates also reflect a decrease in the Banking and Balancing Service rate from $0.0817 per Mcf to $0.0472 per Mcf and an Actual Cost Adjustment (ACA) of ($0.0594) per Mcf, resulting in a total ACA of ($0.2041) per Mcf.
  • Columbia Kentucky must submit all invoices it receives along with its monthly usage reports for each month of the reporting period when it files its future GCA rate reports.
  • The PSC has also ordered Columbia Kentucky to include an electronic version of its future GCA reports containing supporting calculations in Excel spreadsheet format with all formulas, columns, and rows unprotected and fully accessible.
  • If Columbia Kentucky purchases sustainable natural gas from a renewable source during the reporting period, it must document the supplier, cost, and volume purchased in the cover letter of its next GCA filing.
  • Columbia Kentucky must file revised tariff sheets setting out the approved rates within 20 days of the date of service of this Order.

Statistics:

  • The revised GCA rate for Columbia Gas of Kentucky is $6.5809 per Mcf, a decrease of $3.0531 per Mcf from its previous GCA rate of $9.6340 per Mcf.
  • The Banking and Balancing Service rate decreased from $0.0817 per Mcf to $0.0472 per Mcf, a decrease of $0.0345 per Mcf.
  • The Actual Cost Adjustment (ACA) decreased from ($0.3958) per Mcf to ($0.2041) per Mcf, an increase of $0.1917 per Mcf.
  • The Balancing Adjustment (BA) decreased from $0.5367 per Mcf to ($0.1076) per Mcf, a decrease of $0.6443 per Mcf.

Sources:

  • Case No. 2025-00126, Electronic Purchased Gas Adjustment Filing of Columbia Gas of Kentucky, Inc. (Ky. PSC May. 27, 2025).
  • KRS 278.274(1).
  • KRS 278.274(2); KRS 278.274(3)(c); and KRS 278.274(3)(d).
  • Case No. 2018-00150, Electronic Purchased Gas Adjustment Filing of Columbia Gas of Kentucky, Inc. (Ky. PSC May 16, 2018).
  • Case No. 2025-00253, PUBLIC SERVICE COMMISSION.
  • Columbia Gas of Kentucky, Inc.'s Tariff (sheets 48-51).