Providence Gas Co. will be able to “recover” up to $2.45 million in revenue company executives say the utility lost, because the region has enjoyed unseasonably warm winter weather. The state Public Utilities Commission approved the company’s request for exogenous relief, based on the weather’s impact and an unexpected drop in oil prices, according to a statement issued by the gas company on May 28. It is estimated the company lost $4 million in fiscal 1998 because the winter months were warmer than expected. In addition, company officials said they believe they lost about $1.6 million, because prices dropped for competing fuel sources, including oil.
There will be no immediate impact on rates, because in 1997 the company launched a program aimed at stabilizing rates for its customers over a three year period. And this may not even affect rates when the three years is up, if next winter is cold, according to company spokesman James Grasso.
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“The winter weather in the northeast, combined with the precipitous drop in oil prices, was far outside the norm we generally experience in New England,” stated James H. Dodge, chairman, president and chief executive of Providence Gas’ parent company. “This recovery of the impact of exogenous changes will not result in any rate increase during Energize R.I.”
Energize R.I., as the rate stabilization program is known, dropped natural gas prices by 4 percent and froze rates for three years. It is also created a fund so the company can conduct $75 million in expansion and infrastructure improvement projects.
