The Public Utilities Commission of Ohio (PUCO) has authorized Dominion East Ohio to continue its Pipeline Infrastructure Replacement (PIR) program and recover the associated costs for another five-year period, which runs through 2021.
The PUCO also approved an increase in annual PIR spending from the current $160 million to $180 million in 2017, $200 million in 2018 and increasing 3% per year thereafter, and to recover the associated cost from customers through the PIR Cost Recovery Charge.
Dominion launched its $4 billion, 25-year PIR program in mid-2008. The program involves the eventual replacement of over 5,500 miles of the company’s 22,000-mile pipeline system. Most of the pipeline to be replaced was installed in the first half of the 1900s.
“The PUCO’s decision continues to position Ohio at the forefront of supporting pipeline safety through replacement of older vintage pipelines,” said Jeff Murphy, Dominion East Ohio vice president and general manager.
The current PIR Cost Recovery Charge paid by residential customers is $8.12 per month. Under a prior, PUCO-approved agreement, Dominion was able to increase its monthly charge for the program by up to $1.40 each year. The monthly charge could increase by as much as $1.75 in early 2018 and by $1.82 in early 2019, based on program costs in the prior year. The passage of certain tax law changes are likely to reduce the actual increases included in customer bills.
The PUCO reviews Dominion’s expenditures every year to ensure that the PIR Cost Recovery Charge accurately reflects actual expenditures in the program. That charge is reduced by any cost savings that Dominion achieves as it replaces older pipelines. Through 2015, Dominion East Ohio has passed savings totaling over $10.2 million back to customers.
The approved increase in annual PIR spending is necessary to help ensure completion of the program in the originally approved 25-year time frame, in light of increased construction and related costs experienced to date. Those costs have increased as more of the pipeline work is performed in higher cost urban areas and environmental protections have expanded.