New Mexico Gas Co.'s residential customers will see their monthly service rates rise about $3 beginning Feb. 1.

The New Mexico Public Regulation Commission approved a rate increase request by the company Tuesday. The average residential customer using 53 therms of gas a month will pay an additional $3.19 in the fixed service fee. The 6.4 percent rate increase will generate an additional $21 million in revenues for the company.

The rate increase, however small, isn't likely to sit well with the more than 28,000 customers who lost gas for several freezing days a year ago. New Mexico Gas blamed the outage on a drop in supplies due to high demand, and pressure too low in the lines to reach customers.

"This decision was tough given what happened in the last 12 months," said Commissioner Theresa Becenti-Aguilar.

But commissioners noted that by law, the company had the right to request a reasonable return for investors and to cover the costs of improvements to the natural gas system. This is the company's first approved rate increase since 2007.

The rate increase doesn't include the cost to customers of the actual gas used each month. Those costs are established in the gas market and vary depending on how much each customer uses.

New Mexico Gas originally filed a rate request in early 2011 that would have brought in $34.5 million. A dozen parties were part of the rate case.

They reached a stipulated agreement in September, which came before the commission for final approval.

Under the approved rate increase, investors will receive a 10 percent return on their investments -- comparable to what other utilities are paying, according to testimony.

The company wanted the rate increase to be retroactive to January, but commissioners rejected the request.

New Mexico Gas also had requested an interim rate increase pending a final commission decision on the stipulated agreement. The interim rate increase was tabled last week and joined with the hearing Tuesday. "They weren't expecting us to make a decision this soon," said Commissioner Jason Marks.

Contact Staci Matlock at 986-3055 or smatlock@sfnewmexican.com.