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Proposed Oneok split could mean 3-year rate freeze

12/16/2013

WICHITA, Kan. (AP) -- A plan by Oklahoma gas company, Oneok Inc., to spin off its utility operations would mean a base rates freeze until 2017 and small rebates for customers of Kansas Gas Service.

Those provisions are part of a settlement between Oneok, the staff of the Kansas Corporation Commission and the Citizens' Utility Ratepayer Board, The Wichita Eagle (http://bit.ly/Jo0j3p ) reported. The settlement means there will be no opposition to the company split when the plan goes before the KCC.

The settlement contains provisions to ensure the split will be in the best interest of customers and the company, said David Springe, chief consumer counsel for CURB, the state agency that represents residential and small business customers.

"What we tried to do was get customers some tangible benefits today, because you can't lock down costs in the future," Springe said.

Under the proposal, Oneok would be broken into two companies. A new company, One Gas, would take over Oneok's natural gas distribution systems in Oklahoma, Kansas and Texas. The remainder of Oneok would keep the company name and operate its businesses in gathering, transport and processing natural gas and related liquid products.

One Gas would have more than 2 million customers and would become the nation's third-largest publicly traded natural gas utility company, according to testimony filed by KCC accounting chief Justin Grady. Kansas Gas Service has 630,000 customers.

The settlement requires that One Gas won't seek any increase in basic rates for gas delivery that would take effect before Jan. 1, 2017. Customers would receive rebates totaling about $3.4 million a year for three years. Each customer will get a $5.34 bill credit paid in April in 2014, 2015 and 2016.

The proposal also calls for One Gas to contribute $1 million plus $200,000 for administrative costs to charities that help low-income people weatherize their homes.

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Information from: The Wichita (Kan.) Eagle, http://www.kansas.com