The Montana Public Service Commission (PSC) has authorized Montana-Dakota Utilities Co., a natural gas local distribution company (LDC), to increase rates by $1.008 million. The increase includes an allowance for return on common equity of 12 percent. The PSC permitted the new rates to enable the LDC to recover the entire nongas cost increase from the residential customer class. It refused, however, to approve rate rebalancing to shift an additional $1.5 million of revenue requirement to the residential class without a thorough study of both gas and nongas costs.
The PSC also rejected an LDC proposal to decrease test-period operating revenues by nearly $1 million based on observations that use-per-customer had been declining and appliance efficiencies increasing. The PSC found that the LDC's linear regression analysis did not represent a known and measurable change to test-period figures, merely a prediction.