Gas Rate Hikes To Blunt Spikes

December 31, 2003
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GRAND HAVEN — Aquila Networks recently received state approval for a temporary rate increase pending the final outcome of a rate request filed in September.

The Michigan Public Service Commission at the end of November granted Aquila permission to charge customers a maximum of $6.6434 per thousand cubic feet (Mcf) of natural gas, up from $6.08 per Mcf, beginning Jan. 1.

Anticipating a possible spike this winter in wholesale natural gas prices, Aquila asked state regulators in September for authority to adjust rates quarterly as the wholesale market fluctuates, for a retail price cap of $8.1255 per Mcf for 2004.

The commission agreed to Aquila’s request to implement the temporary rate of $6.6434 per Mcf during the interim in which it considers Aquila’s request for quarterly rate flexibility.

In West Michigan, the Monroe-based Aquila primarily serves northwest Ottawa County, all of Allegan County and a small portion of Muskegon County.

The firm has about 37,500 industrial, commercial and residential customers.

Aquila isn’t alone in seeking a rate adjustment.

Under a proposal pending before the commission, Michigan Consolidated Gas Co. has sought approval to lower its natural gas rate, but at the same time to increase its charges for transmitting the gas to customers.

Mich Con has 210,000 residential and business customers in Kent and Muskegon counties and eastern Ottawa County.

The utility is asking the MPSC for approval to raise the monthly service charge from $7.50 to $11.50 and increase the distribution charge 39 percent, from $1.45 per Mcf to $2.02 per Mcf.

The charges cover MichCon’s cost to deliver natural gas, maintain the transmission system and provide customer service and repairs.

In a separate rate proposal filed with state regulators, MichCon asked to lower what customers pay for the natural gas by 6.7 percent, from the current rate of $5.75 per Mcf to $5.36, beginning in January.

In late October, SEMCO Energy, which has some 40,000 customers in the Holland-Zeeland area, received state approval to raise its gas rate from $6.035 per Mcf to $6.7933 per Mcf through 2004.  

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