MidAmerican Proposes to Recoup Costs by Billing Iowa Customers

MidAmerican Energy filed with the Iowa Utilities Board (Docket No. RPU-2015-0003) on November 6 for authority to place into effect a Capital Infrastructure Investment Automatic Adjustment Mechanism (or Tracker) on natural gas bills that go out to its 536,000 gas customers in Iowa.

During the first year in which it is effective, MidAmerican plans to use the Tracker to recover some $2.6 million in“ investments made as a result of governmental mandates and to comply with state or federal pipeline safety regulations” during 2014. Under the plan, average residential customers would pay about 32 cents more on their monthly gas bills.

According to the company, the proposal entails total costs of about $28.6 million in investments, which “will be recovered over a number of years, with carrying and depreciation costs recovered annually until MidAmerican’s next gas rate case.” MidAmerican also requests that the carrying charges include the cost of printing and postage for the customer notices associated with this request, which required expenditures of $261,600.  Approval of this amount would increase recovery in the first year to more than $2.8 million.

Such cost adjustments have been approved by the board in previous cases. Indeed, historically the board has allowed companies to defray the costs of safety improvements with a charge like this, MidAmerican spokeswoman Ruth Comer the WCF Courier of Cedar Falls, Iowa. “We’ve replaced the entire cast-iron pipe in a 20-year project, which is a really important milestone,” Comer said, citing pipeline disasters that have occurred elsewhere in the country.

The company – a subsidiary of Berkshire Hathaway – has expectations that the new Tracker could be in use before year-end. “MidAmerican requests that the board approve the Tracker with an effective date 30 days from this filing, or December 7, 2015,” the company stated in its application, adding, “MidAmerican will begin collecting the Tracker on customer bills (as a separate line item) for usage on and after the date the board approves this request.”

It would be the first increase in natural gas rates the utility has requested in Iowa since 2002.

Customers are able to file written comments and objections to the proposal and request a public hearing with the utilities board. Those must be received by November 30 and may be sent to the Iowa Utilities Board, 1375 E. Court Ave., Room 69, Des Moines 50319. Comer said the proposal also will be reviewed by the state Office of Consumer Advocate, an arm of the Iowa Attorney General’s Office.

The utilities board could act on the request as soon as December 7 and would be empowered to set an effective date for the increase.

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