PIERRE — A natural gas rate hike for MidAmerican Energy has been approved by the South Dakota Public Utilities Commission.
The decision, which came at the commission’s latest meeting on Tuesday, March 28, approved a settlement stipulation that allows MidAmerican Energy Co. to increase its rates for natural gas to its South Dakota customers.
The Des Moines-based company — which provides natural gas services to 31 cities in southeastern South Dakota, including Sioux Falls and Yankton — first submitted the rate increase request nearly a year prior to the decision. The approval is expected to generate more than seven million dollars in annual revenue for the company.
South Dakotans using MidAmerican Energy for natural gas services can expect their natural gas bills to increase overall by an average of 6.4%, according to the PUC, even though the raw rate increase sits at 20.1%.
“There are two portions to your natural gas bill. About 70% of your bill is for the actual gas itself. That is not regulated by this PUC and is not involved in the process we are discussing here today. That is all market driven,” Commissioner Chris Nelson explained. “The other part, about 30% of your bill, is for the distribution. That is regulated by the PUC and that’s exactly what we are dealing with today.”
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Under South Dakota law, utility companies are allowed to recover some costs related to the distribution of the gas, but not for the gas itself. Nelson said that the PUC’s nearly year-long review involved an examination of MidAmerican’s expenditures before settling on the 20.1% increase.
The PUC said the rate increase is the first price hike MidAmerican has implemented for the distribution aspect of natural gas consumption, with the company pointing to needed infrastructure replacement and expansion, as well as inflation.
As part of the rate increase, the PUC negotiated a moratorium that bars MidAmerican from filing for additional price increases until Nov. 1, 2025, said PUC Chair Kristie Fiegen. Terms of the approval also include various capital investments and bill credits for customers.
“I appreciate the work that PUC staff have done and the cooperation MidAmerican Energy and our intervenor have shown to bring us this settlement agreement. There is an immense amount of work that goes into a rate case like this,” said PUC Vice Chair Gary Hanson. “It is a piece of art at this juncture and it is work well done.”
More information regarding the rate approval is available on the PUC’s website.
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