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Aquila Gas Co. rate increase notice jjti: Aquila .,.../ \..~,. P.O. Box 99 Newton, Iowa 50208 April 28, 2005 Michael Van Milligen City of Dubuque 50 West 13th Street Dubuque, IA 5200 1-4864 Dear Mr. Van Milligen: To keep you informed of important events that will aftect customers in your community, I wanted you to be aware of a filing we have made with the Iowa Utilities Board (IUB) for an increase in natural gas rates. The primary reason for the filing is to recover increased operating costs and investments that have been made in the natural gas distribution system since our last rate case, which was based on 2001 costs. Under the proposal, an average residential customer using 875 therms (one therm equals 100 cubic feet) of natural gas per year would see an increase of$I.87 per month, or $22.44 annually. A commercial customer using 3,396 therms of natural gas per year would see an increase of $6.54 per month, or $78.48 annually. The total proposed increase is $4.1 million, representing a 2.7 percent increase in annual revenue. The company's last rate increase, effective in April 2003, was based on 2001 expenses. The rate change requires IUB approval and would likely become effective in early 2006. In accordance with Iowa regulations, Aquila will implement an interim increase effective May 13 until the IUB makes a decision on the proposed increase. The interim increase will be 76 cents per month for the average residential customer, and $1.92 per month for the average commercial customer. If final rates are lower than interim rates, customers will receive a refund for the difference, with interest. The proposed rate increase does not include the cost of gas, which Aquila purchases on customers' behalf. That cost, which represents about 80 percent of a customer's bill, is recovered through the Purchased Gas Adjustment, or PGA, which may vary month-to-month, based on the cost of gas. It is important to point out that Aquila does not mark up the price we pay for gas supplies. Aquila employees take great pilde in providing safe, [eliable service to OUl. communities, and we intend to contiilu~ that performance in the future. Even with the proposed increase, our rates in Iowa remain competitive with regional providers, as well as providers of alternate energy sources such as propane and heating oil. Please provide copies of this letter to other public officials, and if you have questions concerning this filing or any other aspects of our service, please don't hesitate to contact me at (888) 521-4059 or marvin.oppedal@aquila.col11. Sincerely, ~~ Marvin Oppedal Iowa External Affairs Manager CI) en ca CI) ~ u c - CI) ..., ca a:: "C CI) en o Q. o ~ CL. 'I- o CI) u .- ..., o Z &.~ ., ffi ~ ~~~ Q)(Q~5 ~e?>c:: Q)U<CO ~..= ::E ., '" .. 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