Aquila seeks a permanent rate increase

Home heating bills would rise nearly $3 a month for thousands of people on the outskirts of Colorado Springs under the first natural gas rate increase proposed in 15 years by Kansas City, Mo.-based Aquila Inc.

The rate increase needs approval from the Colorado Public Utilities Commission, a regulatory agency that oversees the operation of Aquila and other private utilities.

In the past several years, Aquila has adjusted consumer bills up and down to reflect fluctuations in its cost of buying natural gas, which is permitted under Colorado law.

But the proposed rate increase Aquila filed Monday with the Public Utilities Commission, which the company wants to take effect July 30, is different. It seeks a permanent hike in rates, which cover the company's costs to transport and distribute natural gas.

Under Aquila's proposal, monthly bills for typical residential customers would rise to $89.87, a $2.86 increase from the current $87.01. The rate hike would come on top of recent increases Aquila passed on for its costs of buying gas, which included average monthly hikes of nearly $15 and $18 that took effect June 1 and March 1, respectively.

Monthly bills for typical commercial customers would rise to $350.97, a $9.60 increase from the current $341.37, under the proposal.

Aquila serves about 36,000 customers in Black Forest, Monument, Palmer Lake, Woodmoor, Fountain and Woodland Park.

In proposing the rate increase, the company cited rising operating costs, including employee insurance benefits and company vehicle costs. The increase would boost annual company revenues by nearly $2.7 million.

In addition, since its last rate increase in 1993, Aquila says it's invested about $66 million in its Colorado gas network, while the number of customers has risen to 66,120 from 28,281 in the early 1990s.

This month, the utilities commission probably will vote to set aside the proposed increase and schedule a multiday hearing for fall, said PUC spokesman Terry Bote.

The hearing will include time for public comment. In the meantime, members of the public can call, write or e-mail the PUC.

The PUC will have 210 days from the time it sets aside the rate proposal to make a decision, Bote said. That means the rate hike, if approved, might not take effect until February.

MORE INFO

To comment on Aquila's proposed rate increase, customers can:

• Go to www.dora.state.co.us/PUC/consumer/ConsumerComment.htm

• Write to the Colorado Public Utilities Commission, 1560 Broadway, Suite 250, Denver, CO 80202

• Call (800) 456-0858

• Fax comments to (303) 894-2065