Natural gas and electricity customers of the Wisconsin Public Service Co. (WPSC) will see a jump in their respective rates Tuesday as the company’s new rates officially go into effect. The subsidiary of WPS Resources said that although the actual increase may vary between rate classes, the overall effect of the interim rate increase is 10.3% for electric service and 4.3% for natural gas service.

The increases will be in effect until final electric and natural gas rates are approved by the Public Service Commission of Wisconsin. WPSC said it expects that approval to come in April. If the approved final rates are lower than the interim rates, customers will be refunded any over-collection plus interest.

For natural gas customers who use 910 therms of natural gas annually, the increase will amount to about $2.90 per month. The increase, however, is only on the costs of distributing natural gas, not the total amount customers pay. This January, for example, because the commodity cost of natural gas is much lower than at the same time last January, the company expects that customers will pay almost 43 cents less per therm to heat a typical home. WPSC said the savings for a typical residential customer using 156 therms in January will amount to about $67, despite the increase in the distribution rate.

The increase in natural gas rates will pay for improvements to computer systems and operating and maintenance costs, and does not include the cost of the natural gas itself. The cost of natural gas, which is passed through to customers, is generally the largest factor in the price Public Service customers ultimately pay.

For a typical residential electric customer who uses 630 kWh of electricity, the new rate will result in monthly bills about $5 higher. Much of the electric increase will go toward the costs associated with joining the American Transmission Co., created by the state legislature, and with making improvements to the Kewaunee Nuclear Power Plant.

Improvements to Kewaunee account for 45% of the electric rate increase, WPSC said. New steam generators were installed at Kewaunee this past fall at a cost of more than $120 million. That cost will be collected over the next 8.5 years. In addition, the company needs to substantially upgrade the plant to ensure its reliability through the life of the license — which will expire in 2013. Other contributing factors to the electric increase include the costs associated with operating, maintenance, and capital projects.

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