Foster Ray Hager of Washburn received an increase in his Social Security payments to cover rising living costs. All but $2.82 of that monthly increase could be eaten up though, if the North Dakota Public Service Commission allows Montana-Dakota Utilities to up its gas rates.
North Dakota residents on fixed incomes, like Hager, turned out to testify Tuesday on a proposed natural gas rate increase.
Hager used to pay a $9 fixed charge, as well as another variable charge, to cover the cost of transmission infrastructure maintenance. For the average MDU customer, that came to about $15.
Two years ago the infrastructure fees went to a fixed rate of about $19.50.
Now the company wants to lift it again to $22.50 per month.
“On a fixed income that bites a little bit,” Hager said. “When is it going to stop?”
Social Security makes up 50 percent or more of the income for 61 percent of North Dakotans age 65 and older. One in three older North Dakotans rely on Social Security as their only source of income, according to AARP North Dakota, which is intervening in the case.
“At some point someone has to say no,” Hager said. “Think about senior citizens when you say it’s just $3.”
Much of the testimony heard by the Public Service Commissioners echoed this.
“Everything keeps on going up,” said Eugene Roller of New England.
“Where do the increases ever end? You always need for more, more, more,” said True White of Dickinson.
“Three years from now are we going to be back here again?” asked George Simek of Bismarck.
If the Public Service Commission were to approve the residential hike of 5.9 percent and general service hike of 5.5 percent, it would boost the company’s revenues by $5.9 million in North Dakota.
The increase will cover the cost of replacing about $275 million of existing aging pipeline and other infrastructure in 2018. The company will also be reviewing its replacement needs annually and could come back to the PSC for further cost recovery each year.
Public Service Commissioner Randy Christmann said he understands the need to keep rates low but that there's also need for, "a company that’s strong enough to provide good, reliable service."
Montana-Dakota Utilities has about 42,500 natural gas customers in Bismarck-Mandan, 21,000 around Minot, 13,000 around Dickinson, and 18,000 around Jamestown, as well as many of the small communities in between. About 109,000 customers total in 74 communities will be affected.
Of the company’s 2,575 miles of main pipeline in the state, 25 percent was installed before 1970. And higher risk plastic pipe installed before 1982 makes up 45 percent of the company’s inventory.
Giving the example of New Salem, the company would like to replace steel pipe that has been in use since between 1950 and 1960.
The company told the commissioners that the average residential customer will pay is about $7.29 more per month on their bill than they did in 2004 and $2.98 more compared to last year. The typical residential customer in the state pays about $636 annually for service.
The PSC will hear public comment Wednesday as well as part of its formal review process. The agency has up to seven months to issue a decision on the proposed increase request.