The Montana Public Service Commission (PSC) on Thursday approved interim natural gas rates for Montana-Dakota Utilities, a decision expected to have little immediate impact on consumers as the winter heating season winds down, regulators said.
The Commission granted the company, which has a pending natural gas rate case before the PSC, an interim increase of $850,620, significantly less than what the utility requested.
MDU, which serves 78,910 customers in Billings and eastern Montana, initially sought $1.68 million in interim rates, but Commissioners opted instead to approve a staff recommendation for just over half that amount.
Commissioner Kirk Bushman, R-Billings, pointed out that natural gas prices have dropped some 40 percent in recent years, helping to offset customer costs.
“The good news is natural gas costs are down significantly but we still have costs associated with replacing our aging infrastructure,” he said, noting that interim rates are temporary. “I look forward to furthering the discussion in the official rate case hearing this summer.”
Commissioners said the order protects both the consumer and the company. While MDU argues interim rates are needed to help it recover costs for providing gas service, any over collection from customers during the interim period is subject to rebate at 10.5 percent interest.
The interim rates translate to a 1.55 percent increase for residential customers using 10 dekatherms per month of natural gas, or 91 cents per month.
Because the interim rates will occur during the low-usage summer months, however, the actual impact on utility bills will probably average less than 10 cents per month, commissioners said.
Commissioner Travis Kavulla, R-Great Falls, voted for the overall adjustments in the interim, but opposed the rate of return proposed by MDU.
“The 10.5 percent return that the Commission awarded is considerably higher than recent returns the Commission has granted just in the past couple months,” he said.
Other commissioners voted for the full order, saying they were following the PSC’s administrative rules for interim rates.
The rates are effective April 15 and remain in place until the Commission issues its final order in the coming months. A hearing on MDU’s rate case was originally scheduled to begin May 1, but is postponed with no date currently set.
For more information, visit psc.mt.gov or contact PSC Communications/Research Director Justin Post at 406-444-6171. Follow the PSC at http://www.Twitter.com/@MT_PSC or visit http://www.Facebook.com/MontanaPSC.
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