The proposal says the rate increase would generate $3.5 million in new revenue. That's less than half of the $7.9 million originally requested by NW Natural in November.

However, since that time, the utility decided not to build a new office-operations complex in Clark County.

For commercial customers using an average of 730 therms a month, the increase would be an average 6.7 percent, adding $40.70 to a $640.32 bill.

Residential customers using an average 56 therms a month would see bills increase from $55.58 a month, to $57.75.

NW Natural has about 54,000 residential and business customers in Southwest Washington. Included are a few large industrial ratepayers.

Marilyn Meehan, spokeswoman for Washington Utilities and Transportation Commission, said the commission tentatively will act in early June on the request, but a date has yet to be confirmed. If approved by the commission, the new rates would become effective July 1.

Steve Sechrist, spokesman for NW Natural, said Monday that the utility has withdrawn funding for a new complex that would have been built at Northeast 88th Street and Northeast 72nd Avenue after learning that the costs would be more expensive than the utility had anticipated. He said NW Natural instead is looking at the possibility of buying an existing building and adapting it at a lower cost.

The complex would be designed for consumer services, sales, marketing and engineering, along with construction and maintenance operations.

Jim Russell, lead commission staffer on the general rate case, said that if the rate proposal is approved, it would be the first general rate increase in about three years. General rates cover the cost of services including pipe construction and maintenance, employee costs, insurance, other business costs and approved rate of return for the utility.

Not included are wholesale natural gas prices, which will be addressed in a separate filing in August.

Also to be taken up later this year is $800,000 to cover Washington ratepayers' share of a South Mist, Ore., natural gas pipeline extension, commission staff said.

Ratepayers wishing to comment on the proposed general rate increase may e-mail the commission at comments@wutc.wa.gov or they may mail letters to Washington Utilities & Transportation Commission, P.O. Box 47250, Olympia, WA 98504. The commission also may be reached toll-free at 800-562-6150.