Duke Energy Ohio will apply to the Public Utilities Commission of Ohio (PUCO) a natural gas base rate increase of $34 million, 5.8% overall, effective in early to mid-2008, the company said Monday. It is the division's first general rate filing since 2001.

Over the last six years, Duke Energy Ohio has invested more than $460 million to expand and improve its gas delivery system. Operating costs also have risen consistent with inflation.

"We have made significant investments in our natural gas system to meet customer growth and improve safety and reliability," said Duke Energy Ohio President Sandra Meyer. "These investments have enhanced service and reduced maintenance expenses, helping to minimize the requested increase."

Duke Energy Ohio will seek to implement the increase for residential customers over a three-year period to gradually establish rates for all customers that reflect the actual cost of providing service. For a typical residential customer using 10,800 cubic feet of gas, the increase would result in a total monthly bill of $154.20 in the first year, compared with the current bill of $146.03. In the third year, the typical bill would increase to $158.48. The actual amount of the bill will depend on the cost of natural gas at the time the increases take effect and the level of increase authorized by PUCO.

The company said it is planning to increase funding for low-income weatherization by 50%. And it said it will request authority to continue annual rate updates for its accelerated main replacement program under a tracking mechanism approved by PUCO in 2002. This program is designed to improve the reliability and safety of the natural gas system and is expected to be completed in 2015. So far, the company has replaced approximately 560 miles of cast iron and bare steel pipe in Ohio, or about 47% of the old mains in its system, and approximately 45,000 service lines. This work has reduced the number of gas leaks on the system by 21%.

Finally, the company said it is planning a new metering system to reduce costs and increase access to meter data. The rate filing will seek approval for annual rate updates to recover the cost of the new equipment.

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