Joshua Haiar/South Dakota Searchlight
State regulators will take six months to study NorthWestern Energy’s proposed 9% natural gas rate increase, which the company says would cost a typical residential customer an additional $8.38 per month, or $100.56 per year.
The proposal would generate an additional $6 million in annual revenue for NorthWestern, which delivers natural gas to about 50,000 South Dakota customers. The company also supplies electricity, and it received approval to raise electricity rates earlier this year.
The company applied for the natural gas rate increase last month. The state Public Utilities Commission voted Tuesday to delay the rate increase from going into effect for six months, giving the commission’s staff time to assess the request.
If the commission does not act on the request by the end of the six-month period, NorthWestern may put its requested rate into effect on an interim basis, subject to customer refunds if the commission later decides to reduce the increase.
The commission also voted Tuesday to charge NorthWestern up to $250,000 for costs associated with reviewing the request.
NorthWestern last increased its South Dakota natural gas rates in 2011, raising the typical resident’s bill by about $4.37 monthly. The company argues that rising operational costs and infrastructure investments since then necessitate another increase.
“The need to increase natural gas rates in South Dakota is the compound result of 13 years of investment and inflation,” NorthWestern wrote in a letter to the commission.
NorthWestern raised its South Dakota electric rates by 11% earlier this year, costing the typical residential customer an extra $13.67 per month. The company wanted to raise those bills by $19.14 monthly, but agreed to the lower increase in a settlement with the Public Utilities Commission.