Gas and electric rates are regulated by state regulators following specific ratemaking rules and procedures. In Iowa,
the regulatory body is the Iowa Utilities Board; in Illinois, the regulatory body is
the Illinois Commerce Commission; and in South Dakota, the
regulatory body is the South Dakota Public Utilities Commission.
The city councils of South Sioux City and Dakota City regulate natural gas delivery service rates in Nebraska.
Each regulatory body follows the same general theory, allowing
recovery of operating expenses. Utilities also are allowed to recover the costs of their capitalized assets like
electric generating stations, natural gas distribution pipeline and electric substations. These costs are recovered
over the estimated life of the assets. Utilities also are allowed to earn a fair return on their assets to compensate
investors for capital investments. The rate of return on the investment is determined by the regulating body.
The total amount of the costs to be recovered and the return on investment equals the amount that a utility is
entitled to recover in its rate and is spread over the total usage and customer base to establish a monthly customer
charge and a rate per therm for natural gas or kilowatt-hour for electricity. The regulatory body in each state
approves the allocation of these costs to each tariff.
MidAmerican Energy Company maintains a copy of each of its tariffs on its website.