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UTILICORP'S PEOPLES NATURAL GAS DIVISION REQUESTS MINNESOTA RATE INCREASE

 UTILICORP'S PEOPLES NATURAL GAS DIVISION
 REQUESTS MINNESOTA RATE INCREASE
 KANSAS CITY, Mo., March 6 /PRNewswire/ -- The Peoples Natural Gas division of UtiliCorp United (NYSE:UCU) has filed for a rate increase totaling $7.2 million, or 7.8 percent, in annual revenue.
 The proposed increase, filed with the Minnesota Public Utilities Commission, is the first requested by Peoples in Minnesota since 1986. It will affect 101 communities served by the utility. The new rates will mean an average increase of $3 to $4 a month for the typical residential customer.
 "Although the price of natural gas has declined since our last rate increase in 1986, the cost for us to deliver the gas has gone up," said James McClymond, president of Peoples. ''The current rates are based on 1986 costs, but since then inflation has totaled approximately 24 percent. However, even with this rate increase, the typical residential customer's bill will be about 18 percent less than it was in 1986 due to the lower cost of gas.
 "We have been able to avoid a rate increase for the past six years by improving efficiencies and controlling costs. However, customer growth has not kept pace with the increases in operating costs and we now have reached the point where a rate increase is absolutely necessary."
 Another reason for the rate increase is the Conservation Improvement Program. The 1991 Omnibus Energy Act passed by the Minnesota Legislature requires utilities to spend half of one percent of their gross operating revenues annually to promote energy efficiency programs. Peoples will spend about $600,000 a year, up from $185,000, to satisfy the requirement.
 "We fully support energy efficiency programs that have such potential benefit for the customers and communities we serve," McClymond said. "Using energy wisely is a way for customers to save money and fight inflation.
 "We are committed to keeping costs down and providing safe, reliable natural gas service. We work hard to buy gas at lower prices and pass those savings directly to the customers."
 Peoples will begin charging the new rates 60 days after the filing, subject to refund, in accordance with the Minnesota Public Utilities Commission.
 If the final rates adopted are lower than the interim rates, Peoples will refund the difference, with interest, to customers.
 Peoples serves more than 112,000 homes, businesses and industries in 101 Minnesota communities and a total of 343,000 customers in nearly 330 communities in Minnesota, Iowa, Nebraska, Colorado and Kansas.
 Based in Kansas City, UtiliCorp provides gas and electric service to nearly one million customers in eight states and the province of British Columbia. The company also is engaged in various non-regulated energy and utility related enterprises.
 -0- 3/6/92
 /CONTACT: Phil Hermanson, 816-691-3541, or Jan Zimmers, 402-221-2162, both for UtiliCorp/
 (UCU) CO: Utilicorp United ST: Missouri IN: OIL SU:


AL -- MN012 -- 5990 03/06/92 16:20 EST
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Publication:PR Newswire
Date:Mar 6, 1992
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