RICHMOND — The State Corporation Commission (SCC) has approved a natural gas conservation and rate “decoupling” plan for Virginia Natural Gas (VNG).

The approved conservation programs provide incentives to residential customers of VNG to reduce the amount of natural gas they consume. The rate “decoupling” plan guarantees the company a certain level of revenue whether or not customers use less natural gas.

Over the initial three years of the plan, VNG anticipates spending approximately $6.6 million on various conservation programs. The programs include monetary incentives to customers to replace furnace filters, purchase efficient water heaters, and conduct seasonal home energy audits. The SCC directed the company to include in its conservation program a significant incentive to customers to install programmable thermostats.

All residential customers will see a new line item on their monthly bills that represents a sales adjustment as permitted by law. The Revenue Normalization Adjustment (RNA) Rider means residential customers – whether or not they decrease their individual natural gas usage – will pay more to VNG for the non-gas portion of their bills (approximately 25% of the total bill). However, those customers who participate in the conservation programs can achieve savings on the gas portion of the bill by reducing consumption.

In its order, the SCC wrote, “While we approve the plan herein pursuant to [law], we must acknowledge that the ultimate price that VNG’s residential customers will pay for non-gas service under the plan may be higher than the frozen rates established by the Commission [in a 2006 case].”

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Case number: PUE-2008-00060
Final Order

Note: Commissioner Dimitri did not participate in this case.