Maryland Public Service Commission denounces “unfair” rate hikes from Eastern Shore Natural Gas

Published on August 31, 2017 by Chris Galford

The Maryland Public Service Commission recently objected to proposed rate hikes introduced by a Federal Energy Regulatory Commission (FERC) rate case filed by the Eastern Shore Natural Gas Company (ESNG) earlier this year.

The Commission, in conjunction with the Maryland Office of People’s Counsel, has objected on the grounds that proposed rates, from its design up, are unjust and put unreasonable burden on gas transportation customers on the southern end of its transmission pipeline. Interstate natural gas transportation pipelines,
like ESNG, are regulated by FERC. That line transports gas across the Delmarva Peninsula, though, for distribution to residential and small commercial customers through local distribution companies and to industrial businesses and generators directly.

The proposed hike would increase rates dependent upon which of the company’s five zones its customers happened to be in. Rate increases to gas distribution companies would trickle down to residential taxpayers, and Easton Utilities Commission estimates those rates would increase by a staggering 93 percent.

The MPSC has also objected to an ESNG request for return on equity of 13.75 percent–an amount which far exceeds other recently approved returns. While the rates have already taken effect in the case, the rates are subject to refund if the rate design is later overturned by FERC or a lower rate is reached in settlement.