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Alternative Ratemaking Methodologies Docket No. M-2015-2518883

Alternative Ratemaking Methodologies Docket No. M-2015-2518883. March 3, 2016 Paula A. Strauss Director, Regulatory Strategy & Support Columbia Gas of Pennsylvania, Inc. Columbia’s Proposed Residential Rate Designs. Levelized Distribution Charge (“LDC”)

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Alternative Ratemaking Methodologies Docket No. M-2015-2518883

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  1. Alternative Ratemaking MethodologiesDocket No. M-2015-2518883 March 3, 2016 Paula A. Strauss Director, Regulatory Strategy & Support Columbia Gas of Pennsylvania, Inc.

  2. Columbia’s Proposed Residential Rate Designs • Levelized Distribution Charge (“LDC”) • Flat Monthly Fee for Distribution Service • Volumetric Charges for Gas Costs and Rider Universal Services are Not Changed • Revenue Normalization Adjustment (“RNA”) • Provides Benchmark Distribution Revenues Established in a Rate Case • “Breaks the Link” Between Residential Non-Gas Revenue and Gas Consumption • Volumetric Charges for Gas Costs and Rider Universal Services are Not Changed • Weather Normalization Adjustment (“WNA”) • Adjusts a Customer’s Monthly Revenue Based on Actual Temperature Versus Normal • Volumetric Charges for Gas Costs and Rider Universal Services are Not Changed

  3. LDC is Columbia’s Choice for Residential Customers • LDC Reflects Cost Causation • Removes Existing Residential Intra-Class Cross Subsidies • Sends Proper Price Signal for Consumers’ Usage Decisions • Promotes Clarity for Shopping Customers • Provides Clear Price Signals for Energy Efficiency Decisions • Stability and Predictability • Customers’ Bills are Less Volatile • Columbia’s Revenues are More Predictable • Simplifies an Economic Analysis Concerning Adding New Load • May Help to Facilitate the Use of DSIC • Simplicity of Bills • Low Implementation Costs • No Adjustments or Caps Needed • Consistent Treatment of New and Existing Customers

  4. Columbia’s Rate Designs

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