North Carolina gas utilities seek higher return

By Jim Brumm

WILMINGTON, N.C., April 3 (Reuters) - North Carolina's two largest natural gas distribution utilities are seeking to raise their return on equity, effective November 1, in general rate cases filed with state regulators.

The filings were posted on the North Carolina Utilities Commission Web site late on Wednesday.

In a statement, Piedmont Natural Gas Co said it was seeking a 4 percent, $41 million increase in annual revenues and a permanent extension of the decoupling of gas sales volumes and revenues granted on a pilot basis in the company's rate case three years ago.

The decoupling was authorized by the North Carolina legislature in the Customer Utilization Tracker (CUT) bill passed in 2007.

Piedmont spokesman David Trusty said the increase is designed to support an allowed return on rate base of 9.17 percent, up from the 8.79 percent allowed three years ago when the return on equity was set at 8 percent.

Without the requested rate increase, the filing shows Piedmont's actual return on rate base dropping to 7.19 percent.

PSNC Energy, which also wants to implement the CUT rate decoupling mechanism, said it was seeking a 2.99 percent, or $20.4 million, increase in annual revenues. The company's filing seeks a 9.36 percent return on rate base.

That's up from the 8.9 percent allowed by regulators two years ago in the company's first rate case following the acquisition of Public Service Co of North Carolina by SCANA Corp (SCG.N: Quote, Profile, Research) in 2001, SCANA Investor Relations Manager Bryan Hatchell said.