The Public Service Commission has approved a natural gas rate increase for Xcel residential customers.
It passed on a two to one vote.
The action means the charge would go from $18.48 per month to $22.25 per month, to have the gas delivered. Xcel had proposed a $24 per month charge.
Commission chairman Julie Fedorchak was the “no” vote. She had proposed staying at that $18.48 base rate, and adding a volumetric rate, based on the amount of gas used. Fedorchak said Xcel will be in the mode of replacing gas lines and other equipment for a long period of time.
Fedorchak said the "fixed rate" variable is not without merit.
"But it is a blunt instrument, that smears all new investments into one bucket, and divides that equally between customers regardless of use," Fedorchak said. "It significantly disadvantages lower users to the benefit of higher users."
Fedorchak said as costs rise, she believes a "more refined" rate design is warranted, to give customers more control over their bills.
But Commissioners Shari Haugen-Hoffart and Randy Christmann said they were concerned that the two-pronged rate could cause confusion among Xcel customers.
Christmann said it is as much an issue of environmental awareness and conservation, as it is of sound economics.
"Environmental advocates have rightly noted that recovering fixed costs through volumetric charges creates a perverse incentive for utility companies to resist conservation," Christmann said. "After all, if gas use declines, so does the utility's revenue."
Fedorchak said customers could use “balanced billing” to spread out the costs over a longer period of time.
AARP North Dakota had intervened in the case. It had opposed going from $18.41 to $24. In a statement, AARP said the decision "means North Dakotans will see something of a reprieve from Xcel Energy's proposed residential natural gas rate hike."
