THE VIRGINIAN-PILOT
Copyright (c) 1994, Landmark Communications, Inc.
DATE: Saturday, September 3, 1994 TAG: 9409030436
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: BY DAVE MAYFIELD, STAFF WRITER
LENGTH: Short : 36 lines
Virginia Natural Gas Inc. said Friday that it has asked the State Corporation Commission for a 6.2 percent general rate hike. The Norfolk-based utility said it would use the extra revenues to cover increased costs of doing business and to invest in new facilities for expanding its customer base.
Under rules established by the commission, the rate increase will go into effect Oct. 1. If the commission later cuts the rate request, the utility will credit the difference to customers' bills.
The utility last applied for a general rate increase in early 1992 - at that time, 11 percent. The request was sliced by the commission in June 1993 to 8.7 percent.
The latest increase will raise an average residential customer's bill in the coming winter by about $5.27 a month, to $79.75, the utility said. That doesn't include city or county utility taxes.
Virginia Natural Gas, a unit of Pittsburgh-based Consolidated Natural Gas Co., has rapidly expanded during the past few years. It has 195,000 customers in southeastern Virginia, 18,000 more than at the end of 1991. The utility has spent more than $65 million on new pipelines and distribution facilities to help foster growth during that period.
It also has fallen short of its allowed profit, however. During the 12-month period ended June 30, the utility's rate of return on investment was about 7 percent. Under commission rules, it's allowed up to a 9.97 percent return on investment. by CNB