Fairbanks Natural Gas seeks rate hike

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http://www.adn.com/2014/07/01/3543284/fairbanks-natural-gas-seeks-rate.html?sp=/99/171/

Fairbanks Natural Gas seeks rate hike
By Dermot Cole
July 1, 2014 Updated 8 hours ago

FAIRBANKS -- The private utility that serves 1,110 Fairbanks customers with natural gas disputes the notion that state regulation of its rates will mean lower costs for consumers.

Fairbanks Natural Gas said Monday it wants a 6.92 percent rate increase, filing a cost study and other documents with the Regulatory Commission of Alaska in which it makes the case that it should be allowed to collect $1.4 million more from its customers under standard utility practice.

A consultant who prepared an analysis for the company argued that FNG deserves an overall return of 11.92 percent "relative to a hypothetical capital structure" of 40 percent long-term debt and 60 percent equity.

In the run-up to an agreement in late 2012 under which FNG was to become rate-regulated, one of the key arguments by supporters of rate regulation was that it would mean a better deal for consumers. It's not clear what the RCA will accept or reject from the FNG arguments, but the company is not ready to start charging less for energy.