Most Oklahoma Natural Gas customers will see an average rate increase of about $4 on their monthly bills after a panel approved a rate hike Monday for the state's largest utility.
The Oklahoma Corporation Commission unanimously approved a settlement that allows a base rate increase of $54.5 million in total revenue over the existing rate. Because several expenses that appear on customers' bills as separate charges are being shifted to the base rate, the net rate increase is about $26 million overall.
Officials with ONG, a subsidiary of Tulsa-based ONEOK, said the rate hike was needed to offset some of the $168 million in investments the company has made since its last rate hike was approved in 2005. Among those investments were $57 million spent repairing lines, $54 million in expansions to new customers and $36 million to replace obsolete meters.
"There's never a good time for a rate increase," said ONG spokesman Don Sherry. "Nobody likes to pay more for services, but the reality is that we maintain very high standards of safety and reliability with the service."
Sherry said that the increase in rates is not tied to the cost of natural gas, which is passed along directly to the consumer. He said because of the declining natural gas prices, the overall cost of some customers' bills will remain neutral.
The settlement approved Monday was the result of an agreement between ONG, the attorney general's office _ which represents the utility's more than 700,000 residential customers _ and a group that includes large industrial customers.
Assistant Attorney General Bill Humes told the commission his office believes the settlement is "fair, just, reasonable and in the public's interest."
"There was a significant amount of new construction that was involved in that three- or four-year period (since the last rate increase)," Humes said. "The attorney general's office is always mindful of that type of capital investment because it benefits the company, but it also benefits the consumer."
At the start of negotiations, Humes said his office suggested a $48 million increase over the existing rate, while the utility was seeking $66 million. He said the agreement prevents the need for lengthy litigation, the costs of which would ultimately be passed along to consumers.
Under the rate agreement, the increase will not affect those enrolled in the federal Low-Income Home Energy Assistance Program, or LIHEAP. That program, operated in Oklahoma by the Department of Human Services, provided winter heating assistance to more than 100,000 Oklahoma customers last year.