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NE Regulators Approve Kinder Morgan Customer Charge Hike

The Nebraska Public Service Commission (PSC) last week approved a natural gas rate settlement between Kinder Morgan and the commission's public advocate. The associated rate increase took effect Monday.

Kinder Morgan serves customers in 182 municipalities in central and western Nebraska. The settlement bars the company from seeking another general rate increase until June 1, 2009. This is the first time Kinder Morgan has sought a general rate increase in 13 years.

The 3-2 vote by commissioners approving the settlement followed a series of eight field hearings in large November and early December and a Dec. 18 hearing at the commission's offices. Kinder Morgan made its filing June 6. The settlement specifies a customer service charge less than what was originally proposed by Kinder Morgan.

Prior to Sept. 1, when Kinder Morgan was able to impose interim rates pending an outcome of its application, the monthly customer charge for residential service ranged from $3 to $5, and from $4 to $6 for commercial customers. The company had proposed increases of $13.50 to $15.50 for residential customers and $22.10 to $24.10 for commercial customers.

Under the settlement, the customer charge increased Monday to $6 per month for residential customers. Commercial customers were divided into two categories. Small commercials will pay a customer charge of $8, and large customers will pay $18. Those charges will increase on a graduated basis over the following two years on April 1. In 2008 the service charge will increase to $8 for residential, $10 for small commercial and $20 for large commercial customers. In 2009 the charge will become $10 for residential, $12 for small commercial and $22 for large commercial customers. At the same time, Kinder Morgan's volumetric distribution charge will decrease.

Because Kinder Morgan's interim rates represented only 70% of its full requested increase, no refunds are owed to Kinder Morgan customers. Kinder Morgan could have collected the full amount of its rate increase pending the decision by the commission, but it elected not to do so. Customers in communities paying a $2 monthly litigation assessment to Kinder Morgan will continue to see the charge on monthly bills. The charge resulted from communities contesting Kinder Morgan's rates prior to state regulation.

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