The state Court of Appeals on Wednesday affirmed the state Public Service Commission's decision to grant Arkansas Oklahoma Gas Corp. a $7.2 million rate increase.
The appeals court rejected Attorney General Mike Beebe's arguments that the increase falls unfairly on residential and small commercial customers.
The settlement agreement was the product of negotiations between the state utility regulator, the gas company and large commercial consumer groups. It allows Arkansas Oklahoma Gas to collect an additional 2.42 percent on non-gas fees from all its customers.
Arkansas Oklahoma serves about 47,000 customers in west-central Arkansas.
The plan, approved in December 2002, increased the average resident's total January bill by $2.00, to $38.59. The same customer's total September bill rose by $1.03, to $13.15.
The largest industrial users began paying an additional 0.39 percent a year under the plan.
While rate increases varied between commercial and industrial customers, both of the groups representing their interests supported the settlement. The plan organized rate classes mainly on the volume of gas consumed.
On appeal, Beebe's office argued that the class cost allocation of the agreement unreasonably discriminates against residential ratepayers, while a provision for polling services to transportation customers without imposing a pooling charge unreasonably discriminates against sales customers.
The attorney general also argued that the agreement's treatment of lost and unaccounted for gas results in unreasonable rates and that the increase in the dollar amount of the monthly residential customer service charge was not supported by substantial evidence.