MidAmerican seeks to add small charge to customers’ monthly natural gas bills

MidAmerican Energy has asked Iowa regulators to approve the addition a small charge to customers’ natural gas bills.

If approved by the Iowa Utilities Commission, the charge — called a capital investment charge — would add about 17 cents to customers’ average monthly bills, increasing them by about 0.4 percent.

If the increase is approved, it will help cover the cost of gas delivery system investments that are required by government regulations, MidAmerican said in an April 3 news release.

Geoff Greenwood, spokesperson for MidAmerican, said if the charge is approved, it will recover costs MidAmerican has already invested in its natural gas delivery system.

“These projects are required,” Greenwood said in an email to The Gazette. “Either related to safety mandates that were recently implemented in the gas industry or government infrastructure projects that require relocating or expanding gas pipelines.”

Greenwood said typical base rates help recover the costs for maintenance and growth of MidAmerican’s natural gas system, but the company goes through periods where they are “required” to make additional investments to meet new safety regulations or support large infrastructure projects. He said some of these projects include replacing aging bridges with embedded gas lines or expanding roadways that require underground pipes to be relocated.

After reviewing MidAmerican’s request, the IUC will establish a final charge amount which might be different from the 17 cents proposed by the company.

The commission will determine when the final charge becomes effective. That could be as early as May 30.

“Making the decision to seek a fee increase is not done lightly. We understand the impact that any increase, including a very small one, has to our customers when they are facing inflationary pressures,” Greenwood said. “We always try and manage our costs to ensure that our customers are paying the lowest price for this necessary service, which is why our gas rates in Iowa are more than 40 percent below the national average.”

According to a MidAmerican monthly gas bill breakdown filed with the IUC, the average monthly residential gas bill is $43.88. With the fixed charge, it would go up to $44.05.

MidAmerican has about 620,000 natural gas customers statewide.

Greenwood said state regulators approved a similar minor charge in 2016 for natural gas bills, which he said helped the company avoid “increasing base rates for a very long period.”

“Thanks to aggressive cost controls and smaller, incremental fee increases only when necessary, we hadn’t raised gas rates in Iowa for 20 years before filing our most recent rate case in 2023,” Greenwood said.

Olivia Cohen covers energy and environment for The Gazette and is a corps member with Report for America, a national service program that places journalists in local newsrooms to report on under-covered issues.

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Comments: olivia.cohen@thegazette.com