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Atlanta Gas Light pushes for rate hike to cover system upgrade costs

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Atlanta Gas Light pushes for rate hike to cover system upgrade costs

Atlanta Gas Light Co. has requested a $22.3 million rate increase, planning to devote nearly half of that sum to system upgrade work.

"With more natural gas supplies coming online, energy experts are predicting rates will stay low for the foreseeable future. Now is the time to stay the course," Atlanta Gas Light President Bryan Batson said in a statement accompanying the Dec. 1 rate request to the Georgia Public Service Commission.

Low gas prices give gas providers more leeway to invest in their systems without pushing customers' bills above recent historic levels. The utility said the average customer is paying less each month now than was the case in 2007. The rate hike Southern Co. subsidiary Atlanta Gas Light has requested would increase the average customer's bill by about $1 per month, Batson said.

Roughly 46% of the requested funds would go towards replacing vintage pipes, boosting capacity on existing systems to get more gas to high-growth areas of Georgia and extending infrastructure to new customers. Another 20% would be geared towards operations and maintenance, while 34% would cover conventional rate base, the company said.

The utility has already replaced all its 2,712 miles of cast iron and bare steel pipe, removed 756 miles of aging plastic pipe that has been found susceptible to degradation, installed 126 miles of new pipe and put in line extensions to expand service access. Since 2009 and the flood of shale gas into the marketplace, Atlanta Gas Light has been especially active on its infrastructure projects.

"While rates are low, Atlanta Gas Light is requesting to maintain this level infrastructure spending for the next three years," Batson said.

Pipeline upgrade work can also help the company stay in compliance with regulations. The Georgia PSC imposed a $250,000 penalty on Atlanta Gas Light in 2015 after finding that one of the utility's pipes had corrosion deficiencies and other problems. The commission has historically been supportive of utilities' pipeline upgrade work, touting those programs as "national models" that reduce the risk of major disasters.