Imagine requiring stores to discourage shopping or an ice cream parlor to advocate dieting.

It seems illogical, but for Piedmont Natural Gas, its a proposition that has landed the company in a tug of war between the Utilities Commission and Attorney Generals Office.

As a natural gas provider, Piedmont, which serves the Triad, is policed by the commission, which reviews the companys actions and rate plans.

Last fall, the commission let Piedmont implement an accounting measure that allows it to balance its cash flow better -- in hopes that the company would be motivated to tout conservation.

Basically, the company, with the commissions concurrence, can adjust rates slightly to account for consumer demand. For instance, if demand for natural gas is less than expected because of a warm winter, the company can raise its rates to ensure an adequate amount of money continues to come in.

Likewise, if demand is higher, the company can lower its rates to keep from getting too flush with customers cash.

Advocates argue that this adjustment was designed to stave off red tape and keep Piedmont, a publicly traded utility, on sound financial footing with its shareholders.

These adjustments have always been made, said Bill Gilmore , a senior operations analyst with the commissions natural gas division. They just havent been made in real time.

But enter the state Attorney Generals Office. It finds Piedmonts new accounting measure so egregious that it has appealed the commissions decision -- a move that might culminate in taking the debate to the state Supreme Court.

The attorney general describes the commissions decision as erroneous, arbitrary and capricious, according to documents filed with state regulators.

The office wont comment beyond these filings, which focus on two key questions.

One: Is it illegal to change what customers pay now based on past events?

And two: Does the accounting method hurt customers who make efforts to use less gas?

The attorney generals opinion is a resounding Yes to both.

Setting customer rates retroactively is illegal in North Carolina, and filings from the attorney general make the case that Piedmonts accounting method breaks the law.

Furthermore, the filings state, the main impact of the adjustment is to penalize customers for conserving energy. Reductions in consumption will prompt rate increases.

But Piedmont officials disagree.

One major reason the accounting method was approved in the first place was to encourage Piedmont to tout conservation.

In the past, the company hasnt had much reason to conserve. Customers who cut back on gas usage pay less, which means its harder to make money.

Now that Piedmont can tweak rates every six months to even things out, the company wont lose if its customers start to save energy, said spokesman David Trusty.

We have no reason not to encourage customers to conserve, he said.

But that could be unfair to consumers who shell out on conservation efforts with visions of saving money on their bills later, the attorney generals office claims.

Piedmont, the commission and the attorney generals office are working to end the fight over customer rates.

Those discussions with the AGs office are ongoing, Trusty said . We certainly hope that they result in something thats good for everyone concerned.

If not, the appeal automatically will head to the state Supreme Court.

Contact Michelle Jarboe at 373-7075, or mjarboe@news-record.com