Summit Seeks 30% Rate Increase for Natural Gas Service

(Summit Utilities)

Summit Utilities, the natural gas company that serves more than 400,000 Arkansas homes and businesses, filed a request Thursday with state regulators to raise rates an average of 30%.

The Colorado-based utility mailed a letter to customers saying that its agreement to buy the Arkansas assets of CenterPoint Energy in 2022 required Summit to submit a rate case with the Arkansas Public Service Commission.

The new rate, if approved by the commission, would raise the average Summit Arkansas customer’s bill by $18.48 per month, nearly 30%. For small commercial customers, the average bill will increase by about $28.

The letter to residential and small commercial customers, came from the company’s SVP and Chief Customer Experience Officer Fred Kirkwood. It said the increase is necessary to offset the cost of inflation, economic conditions and capital investments in its natural gas infrastructure.

The increases won’t take effect for at least 10 months, Kirkwood said.

As Arkansas’ largest natural gas utility, Summit has a duty to “provide safe, always-on, natural gas for everyday heating, cooking, hot water, and more,” the letter said. “It is paramount we are transparent about our need to continue investing in our infrastructure and in the safety and reliability of our systems because our system plays a vital role in supporting the communities we serve.”

As an investor-owned, regulated utility, Summit is guaranteed a base rate of return on equity by regulators. The sought increase would make Summit’s return rate 11 percent.

“Arkansas law requires regulated utility rates to be reasonable and the service they provide to be safe and reliable, and it requires that utilities be allowed to generate revenues to keep the company in good financial health,” Kirkwood wrote in the letter. “A typical rate case lasts 10 months and is a thorough, transparent, and open process.”

Summit said that its existing rate has not changed since the 2022 deal with CenterPoint, and that rising operational costs require a reasonable rate increase “so we can provide you with safe and reliable gas service” constantly.

“We are proud to provide service to more than 410,000 Arkansas customers and maintain nearly 14,000 miles of pipeline in the state,” Kirkwood wrote. “Summit has made substantial investments in the safety and reliability of our infrastructure, and we are committed to continuing our investment to replace aging infrastructure and ensuring the safety and reliability of our natural gas system in Arkansas.”

Kirkwood said Summit invested more than $155 million in 2023 to ensure that its systems are safe and reliable. “In addition to our investments, we have hired more than 300 Arkansans in various positions throughout our company to provide the best service possible to our customers.”

The new rate would ensure prompt responses to customer calls, constant access to emergency dispatch, investment in smart technology to monitor and maintain pipelines, and a local well-trained team of technicians and support personnel.

The PSC rate review process will consider financial and operational data and is designed to protect ratepayers, according to the commission. Arkansas Attorney General Tim Griffin, who investigated a flood of billing complaints against Summit last year, said he would be reviewing the rate request even though it falls under the PSC’s purview.

The commission cleared Summit of overcharging customers during its transition of billing services from CenterPoint, but is requiring the gas company to submit quarterly reports on any billing complaints or irregularities.

“Through the rate case process, we are committed to working closely with the APSC, the Arkansas Attorney General’s Office, and other stakeholders to remain transparent and establish fair rates to continue providing reliable and safe service to your homes and businesses,” Kirkwood wrote. “As we progress through our rate case, we are committed to keeping you informed and answering any additional questions you may have. Visit our website, summitutilities.com/ratecase, for the most up-to-date information and a video explaining the rate case process.”