Roanoke Gas Co. acted prudently when it decided to build two gate stations, in Franklin and Montgomery counties, to connect with the Mountain Valley Pipeline, a hearing examiner for the State Corporation Commission has determined.
The company’s involvement with the controversial natural gas pipeline has been a bone of contention in its request to increase base rates for residential customers by nearly 11% — a proposal that now goes to the full commission.
In a 72-page decision released late Tuesday, hearing examiner Alexander Skirpan recommended that the commission approve an increase closer to 4%, which would amount to an extra $2.11 on an average residential customer’s monthly bill.
A final decision by the SCC is expected early next year.
In earlier proceedings, the SCC staff argued that the rate increase should not include the cost of building the two gate stations, which will allow Roanoke Gas to expand its service area to Franklin County and in eastern Montgomery County with gas from Mountain Valley.
Skirpan recommended that the gate station and a related distribution system reinforcement in Montgomery County be covered by the ratepayers, in part because the project will provide service to existing Roanoke Gas customers.
But the Franklin County gate station, which will serve the new Summit View Business Park and other parts of the county where Roanoke Gas has no current customers, should not be included, Skirpan recommended.
Skirpan wrote that the gate station would not provide gas to any customers during the current rate year.
The 303-mile pipeline through West Virginia and Southwest Virginia is expected to be completed by the end of next year.
In a statement Wednesday, Roanoke Gas said it was pleased that the cost of the Montgomery County infrastructure was covered by Skirpan’s recommendation.
“We are disappointed the hearing examiner found that the Summit View gate station should not be included in the rate base at this time,” the statement read.
“However, we are committed to serving Franklin County and the Summit View Business Park with natural gas as we believe it is vital to the economic development of Franklin County and we will continue toward the ultimate completion of the Summit View gate station and its interconnection with MVP.”
In a separate decision earlier this year, the SCC approved Roanoke Gas’ request to extend service into Franklin County, where it estimates there are about 1,000 potential new customers.
Roanoke Gas currently has about 62,200 residential and commercial customers in the cities of Roanoke and Salem and the counties of Bedford, Botetourt, Roanoke and Montgomery.
Some pipeline opponents have accused Roanoke Gas of passing along to customers the rising cost of the pipeline. But the company has said there’s no connection between its rate increase and an investment by a sister company, RGC Midstream, which is a 1% partner in the $5.5 billion project being built by five energy companies.
The company’s base rate covers the costs of repairing, upgrading and operating the system of pipes used to deliver natural gas to homes and businesses. If the pipeline were to mean higher costs for customers, that would be reflected in the fuel rate portion of their bills.