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EAST OHIO GAS ANNOUNCES INTENT TO FILE FOR RATE INCREASE

 CLEVELAND, Dec. 10 /PRNewswire/ -- For the first time since 1986, citing a 32-percent rise in inflation since then (based on the Consumer Price Index), East Ohio Gas today announced its intent to file for a base rate increase with the Public Utilities Commission of Ohio (PUCO), no sooner than 30 days from today. The company will be seeking $98.9 million in additional revenue, along with an experimental provision in which the company would agree not to file for another rate increase for two years.
 If approved, typical residential customers would see an increase of approximately $7.73, or 11.5 percent, in their total monthly bills. The company expects the new rate to go into effect in fall 1994.
 "Being able to avoid filing a rate increase for nearly eight years is an accomplishment of which we are proud," said Patrick A. Carney, vice president of public affairs. "At East Ohio Gas we have been able to do so only by controlling costs through prudent management, cost containment and enhanced diversification of customer products. We regret having to take this step, at this time, but this modest increase is necessary in order to maintain our high quality of dependable service to more than one million residential, commercial and industrial customers."
 Carney noted that virtually every area of the company has, over eight years, experienced increased costs of operation due to inflation, taxes, higher medical costs, federal and state regulatory changes and required maintenance of nearly 18,000 miles of underground pipeline and related facilities.
 As part of the filing, the company will seek to align its rates to reflect the actual cost of service to all customers, as well as fully separating natural gas transportation and gas storage services for large industrial customers, as mandated by recent Federal Energy Regulatory Commission policies.
 In the almost eight years since the company's last rate filing, East Ohio Gas has invested more than $275 million in capital improvements such as extending and replacing main lines, upgrading compressor and transmission facilities and enhancing its computerized customer service dispatch system to serve customers more efficiently.
 The company is seeking a lower rate of return on equity, at 12.5 percent, compared with the 13.6 percent rate authorized in the 1986 base rate case. The rate of return on equity is provided by the PUCO to ensure that additional funds will be invested in the utility in the future.
 As part of its base rate filing, East Ohio Gas is asking the PUCO to approve two new incentive rates, that, if approved, would be part of the new overall base rate.
 The company is asking for a two-year Experimental Operating Incentive Plan rate that would allow the company to adjust its base rate annually, according to the federal government's Gross Domestic Product deflator index. If this incentive rate is approved, the company would agree not to implement an additional base rate increase for two years.
 The second new rate provides incentives for the company to promote energy conservation by its customers. The new rate would allow the company to recover investment in, and revenues lost due to, approved conservation-related or "demand-side management" programs. Currently, the company's rates only provide it incentives for increasing the natural gas use of its customers.
 "Both of these new rates are designed to make the company more responsive to our current business environment and customer needs," Carney said.
 East Ohio Gas is also recommending a merger with its sister company, River Gas Company of Marietta, largely because of new federal regulations which have restructured the interstate pipeline industry and changed the way utilities obtain natural gas supplies. East Ohio Gas' extensive experience and expertise in this area will benefit the customers of both companies. River Gas serves 20,000 customers in southeast Ohio.
 East Ohio Gas is the largest natural gas subsidiary of Consolidated Natural Gas (NYSE: CNG), headquartered in Pittsburgh. The 2,500 employees of East Ohio Gas serve a 20-county area throughout northeast Ohio.
 -0- 12/10/93
 /NOTE TO EDITORS: The intent to file for a general rate adjustment must be announced to the Commission and affected communities at least 30 days before an actual filing is brought before the Commission. A decision by the PUCO usually takes about nine months and is based on documentation and testimony provided by the company and other interested parties./
 /CONTACT: Tracy Oliver of East Ohio Gas, 216-736-6224, or toll-free in Ohio, 800-556-4400/
 (CNG)


CO: The East Ohio Gas Company ST: Ohio IN: UTI SU:

AR-KL -- CL008 -- 2694 12/10/93 14:02 EST
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Publication:PR Newswire
Date:Dec 10, 1993
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