National Fuel Gas Co. expects its proposed settlement on gas rates in its Western New York service territory to increase its profits by about $1.1 million a year, company officials said.
The settlement, which was announced on April 15, will reduce the delivery charges paid by its customers by an average of 2 percent beginning in August, while also increasing the revenues flowing to National Fuel by roughly $21 million.
"We think this was a creative settlement where all of the parties got something," said Ronald J. Tanski, National Fuel's treasurer and principal financial officer, during a conference call with analysts and investors.
The settlement, which has won the backing from most of the main players in the rate negotiations, including the state Public Service Commission staff, still must be approved by the full commission. The commission is expected to consider the settlement at its July meeting. The settlement, which ended National Fuel's bid for a 5.6 percent rate increase, increases the base rates that the Amherst-based energy company will charge its customers, but will reduce the overall bills those customers pay by refunding $32.5 million in tax money already collected by the company over the next two years.
The settlement will lower the delivery charges that its customers will pay by about $15 million, or $20.56 a year for the average residential customer, during the two-year period covered by the agreement.