DES MOINES, Iowa -- The Iowa Utilities Board permitted a $135.6 million rate increase for MidAmerican Energy Friday, the first increase the company has seen in 16 years.
The increase will be phased in increments of $45.2 million over the next three years. The board previously approved the first, temporary hike last year that increased resident's monthly bills about $2.73, a 3.6 percent increase.
MidAmerican's previous proposal included a $2.75 increase in 2015 and $2.68 in 2016. MidAmerican filed a petition for the increase in May 2013.
Libby Jacobs, Iowa Utilities Board chairwoman, said future increases for consumers couldn't be determined until the final settlement is reached.
The board also made several modifications to the settlement that would help protect consumers including a $200 yearly cap on increases for residents. Non-residential customers would have a $1,500 cap.
"We think that's important," Jacobs said of the balance between helping consumers and companies. "Obviously consumers watch their pocket books and we want to make sure it's appropriate but yet also we're statutorily required to make sure the financial viability of the company is strong."
The settlement also requires MidAmerican Energy to not request another rate increase until January 2018. MidAmerican Energy would also provide the agency with semi-annual reports and studies to monitor revenue and costs based on settlement decisions made Friday morning.
Board member Sheila Tipton said during the discussion that even with the increases MidAmerican Energy, which supports more than 640,000 electric consumers in the state, would continue to have among the lowest rates in the Midwest. The Des Moines-based utility company has the seventh lowest rates in the country.
The proposed increase isn't final until MidAmerican Energy fully reviews the settlement along with the board's conditions, a MidAmerican official said. The board will release a final, written order no later than March 17.
"Overall I think it's a fair decision for all the rate payers in the sate," Jacobs said. "It will be very different to implement just because there are many different pieces to it but I think we're all up to the challenge."