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Richmond Gas Works adopts rate increase, seeks in-house crews to speed pipeline work
Summary
City staff presented a financial plan for Richmond Gas Works that includes adopted 5.25% rate adjustments, federal PHMSA grants to rebuild reserves, and a multi-year plan to hire internal construction crews to replace expensive contracting costs.
Dan Reifenberg, who presented Gas Works operations for the Department of Public Works, told the committee the utility’s adopted financial plan aims to rebuild capital reserves while avoiding a rate shock for customers.
He said the council-adopted rate adjustment effectively amounts to a 5.25% increase and that projected revenues under the adopted rates would begin to exceed expenditures, allowing the utility to grow its capital reserves. Reifenberg said the gas utility reported “$10,000,000 free cash flow” but has “very limited liquidity.”
Reifenberg told members PHMSA grants (federal pipeline safety grants) have covered roughly $65,000,000 of recent capital needs and that the grants, together with the adopted rates, should allow the utility to slowly rebuild operating and capital…
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