PIERRE, S.D. (KELO) — The 104,000 retail customers who buy natural gas from MidAmerican Energy in southeastern South Dakota will be paying the company more for distribution costs after April 1.

The South Dakota Public Utilities Commission on Tuesday accepted a rate settlement that came jointly from the company and the commission’s staff.

The settlement calls for a 20.1% increase in the rates charged for distribution after all 2023 distribution projects are completed.

Customers’ bills generally run about 70-30 for the actual natural gas and the cost of distribution. The commission regulates distribution rates but has no control over market price for natural gas.

“When purchased gas costs are included, the overall revenue increase is 5.4 percent,” according to the commission staff’s revised memo.

MidAmerican originally applied for increases that would have generated $7 million more in revenue. That would have raised customers’ total bills for gas and distribution by about 6.4%. The company imposed interim increases in mid-November that reflected a 23.4% hike in the distribution rate.

Commission chair Kristie Fiegen thanked MidAmerican for cooperating in reaching the settlement. MidAmerican sought the increase because of growth and to replace aging technology.

“It’s to fulfill future needs, and I appreciate that,” Fiegen said.

Commissioner Gary Hanson praised the PUC staff for “number crunching” and “sleuthing.”

“It’s a piece of art at this juncture,” Hanson said.

The commission on Tuesday also approved a refund program that MidAmerican plans to start this spring. Commissioner Chris Nelson said the company needed to change the notice it will send customers because it placed emphasis on the overall increase of 5.4% when the distribution rates were going up by roughly four times that much.

“It’s brutal, but we’ve got to be honest,” Nelson said.

The commission took a 10-minute recess while MidAmerican officials worked on new phrasing. Their revised version will be filed in the coming days.

“I’m good with that,” Nelson said.