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Archive for Tuesday, April 3, 2007

Hearing on natural gas rate increase is Monday

April 3, 2007

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State regulators will conduct a public hearing Monday on Aquila Inc.'s proposed $7.24 million natural gas service increase, which would affect 33,000 Lawrence customers.

The proposal would increase a typical residential customer's bill by about $4.40 a month or about $6.37 a month, depending on how each bill would be calculated, according to the Kansas Corporation Commission.

The hearing will be conducted at 7 p.m. Monday at the Dole Institute of Politics, on Kansas University's West Campus.

Curt Floerchinger, a spokesman for the company, said the increase was needed to maintain and improve lines, and build connections to new customers: "We have more than 2,000 miles of pipes in Kansas, and we are investing $6 million to $7 million per year in the Kansas gas system," Floerchinger said.

The increase wouldn't affect the cost of gas, which makes up a large portion of the gas bill.

Commission staffers recommend cutting more than $3 million from Aquila's proposal, reducing it to $4.2 million. The Citizens' Utility Ratepayer Board wants the request be cut by more than half, to $3.45 million. CURB says that Aquila should reduce its proposed increase by accepting lower profit levels for shareholders, reducing some salary and wage increases and eliminating vacant positions.

Aquila is seeking a 21 percent increase in delivery revenue to residential customers, and 32 percent to commercial customers. The company also is proposing different billing designs that would increase fixed customer charges. In addition, the company is proposing a fund to provide customer rebates to encourage replacing furnace and water heater equipment with more efficient models. The average residential customer would pay about $5.25 a year for this fund.

"We are discouraged that once again rates will increase for customers; however, we hope that the new rebate and weatherization fund will help consumers reduce their natural gas usage," said David Springe, consumer counsel for CURB.

The Kansas Corporation Commission is expected to make a decision on the rates in June.

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