New Gas Utility Productivity and Benchmarking Study

PEG personnel were pioneers in the field of gas utility cost benchmarking and productivity research. We prepared our first study of gas transmission productivity for the Interstate Natural Gas Association in 1990 and our first study of gas distributor productivity for Southern California Gas in 1991. We first benchmarked the cost of a gas distributor for Boston Gas in 1996. A report on our latest US gas utility productivity and benchmarking study was just released in an Ontario Energy Board proceeding that is considering a new multiyear rate plan for Canada’s largest gas utility, Enbridge Gas. 

We report that total factor productivity growth in the US gas utility industry has recently averaged a 1.57% annual decline. Replacement of old cast iron and bare steel mains and compliance with federal transmission system safety rules were major reasons for the productivity decline. 



Utilities without cast iron and bare steel mains transmission lines generally had more rapid productivity growth. We have also updated our econometric benchmarking models of gas utility operation and maintenance, capital, and total cost.  Both lines of research are useful in developing performance-based ratemaking approaches for gas utilities confronting an energy transition.