CenterPoint Energy Minnegasco, Minnesota’s largest natural gas distribution company, on Wednesday filed a request with the Minnesota Public Utilities Commission (MPUC) to increase its residential rates on average 4.1%.

Minnegasco said the request is its first since 1995. If approved, the average residential customer’s bill would rise by about $38 a year or $3.17 a month. A final decision is expected in May 2005.

“CenterPoint Energy Minnegasco’s rate request is necessary for two reasons,” said Phil Hammond, vice president, supply management and regulatory services. “First, current rates do not recover the increased costs of providing utility distribution service to our more than 745,000 customers. We have not increased these rates since 1995. In that time, the cost of providing safe and reliable service to our customers has increased, while average customer demand has decreased. Second, the rate request will improve the stability of customers’ bills by lessening the impact of weather related usage. The requested rate structure will provide rates to all of our customers that better reflect the costs of serving them.”

If approved, the requested rates will generate a $21.77 million increase in annual revenue, or 1.8%, and will affect individual monthly bills differently depending on natural gas use and customer type. The requested changes in distribution rates cover only the cost of providing utility distribution service to the company’s customers, which makes up about 20% of an average residential customer’s bill.

Customers likely will see the first change on their bills beginning Oct. 1, when interim rates will take effect, said Minnegasco. Interim rates would stay in effect until a decision is made by the MPUC, and final rates are implemented. Later this year, public hearings will be held to provide customers and other interested parties the opportunity to comment on the rate request.

If approved, final rates would be implemented in the summer 2005. If final rates are lower than interim rates, the company will refund the difference to customers with interest, and if they are higher than interim rates, customers will not be required to make up the difference.

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