Office of the Ohio Consumers' Counsel

Historical Journal

Transmission case nets $600M in savings for residents

As possibly one of the largest settlements in U.S. history at the time, the Office of the Ohio Consumers' Counsel (OCC) played a crucial role in the 1985 settlement with Columbia Gas Transmission Corp. (TCO), which saved consumers more than $600 million. On June 14, 1985, the Federal Energy Regulatory Commission (FERC) approved a modified settlement which benefited customers in Ohio, Kentucky, Maryland, New York, Pennsylvania, Virginia, West Virginia and the District of Columbia.

The OCC became involved in the case in August 1981 when it disputed TCO's proposed 23 percent increase in its purchase gas adjustment which was used to reflect the difference between the pipeline's actual costs and its cost recoveries. Along with other parties in the case, the OCC argued that TCO had used purchasing practices that constituted abuse under the 1978 Natural Gas Policy Act, resulting in excess prices that should be refunded to consumers.

The FERC agreed with the arguments laid out by the OCC and others and ruled in January 1984 that the TCO did abuse purchasing practices. The settlement included several provisions including a two-year rate moratorium, a decrease in purchase gas adjustment rates and that TCO would absorb costs in excess of the agreed upon rate (it was allowed to attempt to recover the deferred amounts).

Once the settlement was finalized, several Ohio distribution companies, including Columbia Gas of Ohio, Cincinnati Gas & Electric and Dayton Power & Light, filed applications with the Public Utilities Commission of Ohio for reductions in the gas cost recovery rate in response to the settlement. The filings allowed for smaller recovery rates that could be effective beginning with the July billing month.

Next: OCC saves consumers more than half a billion dollars