National Fuel to PSC: Hold Line on Delivery Rates

March 29, 2013 Updated Mar 29, 2013 at 7:15 AM EDT

By Dan Miner, Business First

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National Fuel to PSC: Hold Line on Delivery Rates

March 29, 2013 Updated Mar 29, 2013 at 7:15 AM EDT

WILLIAMSVILLE, N.Y (Business First) - National Fuel Gas Co. submitted this week a proposal to the state Public Service Commission that would keep its delivery rates flat for Western New York customers through May 31, 2016. The company has not increased its delivery rates since 2007.

National Fuel said it is had been able to hold rates flat ­- except for state-mandated tax increases - because of cost-cutting measures and business efficiencies.

The Williamsville-based company (NYSE: NFG) also recently projected it will continue to significantly increase its natural gas production through 2014. Most of that increase is expected to come from its Pennsylvania operations, where it has steadily increased natural gas production from the Marcellus Shale.

"It's important to recognize that unlike the downstate utilities, National Fuel cannot avoid rate increases by increasing sales," said Anna Marie Cellino, National Fuel's president. "This is because our Western New York service territory is highly mature with little growth and in populated areas, an almost 100 percent saturation of the heating market. As a result, the only realistic means of avoiding a rate case is by increasing our productivity and simultaneously cutting expenses."

National Fuel also noted that it has not received a customer complaint in the past 16 months, and has invested more than $190 million into its Western New York infrastructure since 2007. The company said its savings have come in the form of labor costs, health insurance, reduction of its property and income tax responsibilities and its equity ratio.

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