Area residents feel pinch of utility prices

March 25, 2008 08:50 pm

— By Melissa Dunson
mdunson@joplinglobe.com
It was a chilly winter for Seneca resident Ray Alexander.
At 86 years old, Alexander pulled out his electric heater and stopped using propane. He said he couldn’t afford it on his Social Security income. Instead, he put in a small, wood-fired heater. It costs him $400 to heat his home for the winter now, but the heat doesn’t cover the whole house.
He has made up his mind that this summer, he will plant a garden to try to supplement his meager grocery budget, and will run his air conditioner only from 4 p.m. until he goes to bed.
When Alexander’s other monthly bills went up, he quit driving. He doesn’t go to the doctor anymore. Instead, he relies on herbs and luck to keep from getting sick. He said he can hardly remember what a good steak tastes like.
“I never dreamt things would be like this,” Alexander said. “Everything has just gone downhill. Who can afford this anymore? I can’t afford nothing anymore.”
Raymond Smith, a retired social worker living in Goodman, turns his heat off at night. As a Vietnam War veteran, he is entitled to help from the U.S. Department of Veterans Affairs, but he said he never took it until recently. With his utility bills rising, he said he can’t afford his medications anymore.
“People do need to conserve more, but the money has got to come from someplace, and I don’t know where that is,” Smith said. “I’m cutting back constantly, but there are certain things you just can’t cut.”
Chad DeGonia, 28, Joplin, is young, educated and has a job in the growing health-care field. He recently took a second job picking up bodies in the middle of the night for Parker Mortuary. A big motivation for him was a free room above the mortuary with all the utilities paid.
“It was definitely one of the pluses of this job,” DeGonia said. “Fortunately, now I don’t have to pay for my utilities, but it’s gotten ridiculous. It’s pinching everybody’s pickets.”
All three men are examples of the wide effect rising energy and utility costs are having on local residents.
In the past year, the total cost for water, natural gas and electricity in the Joplin area has gone up substantially. And more rate hikes could be on the way.
Water
Missouri American Water Co.’s Joplin customers saw a 64 percent rate increase in October 2007. The average residential customer using 5,700 gallons a month was paying $16.29 a month. That cost is now $26.70.
Christie Barnhart, Missouri American communications manager, said the utility tried to soften the blow by requesting a 25 percent increase for the entire coverage area. The Missouri Public Service Commission instead authorized district-specific increases that raised rates as little as $2 a month in St. Charles or as much as nearly $10.50 a month in Joplin.
That hike is supposed to pay for the first phase of a $44 million project to upgrade the Joplin water-treatment plant. It was the first general rate increase for Missouri American since August 2000.
The most recent increase does not include the construction that now is under way at the Joplin plant. Missouri American will file for another rate increase in the next couple of years to pay for the project’s second phase.
Electric
Empire District Electric Co. raised its rates in January 2007 by nearly 10 percent. It raised the bill of the average residential customer, using 1,000 kilowatt-hours of electricity a month, by $8.20. The utility is requesting another rate increase, of $9.75 a month, associated with the January 2007 ice-storm costs. The PSC conducted a public hearing Tuesday night on that request, and another public hearing is scheduled for 11:30 a.m. today at Missouri Southern State University’s Webster Hall in Joplin.
Empire reported a $400,000 loss during the fourth quarter of 2007, citing another catastrophic ice storm in December 2007 and problems with its Asbury generator. Together, the company said, the two ice storms increased Empire’s 2007 maintenance costs by $5.4 million. The utility has not yet announced how it plans to recoup the costs of the December ice storm.
Empire had reported earnings of $33.2 million for 2007, and it recently amended its covenant to allow the company to pay dividends to its investors even if the company doesn’t have positive retained earnings. At the time Empire requested the amendment, Amy Bass, Empire spokeswoman, said the company didn’t know if it would end up with negative retained earnings, but it wanted to make the change just in case.
Natural gas
Missouri Gas Energy raised its flat residential service rate by $3.60 a month a year ago. That cost is not associated with the price of natural gas, which makes up 70 percent of a customer’s bill. MGE’s monthly service charge is now $24.62. The company’s 2007-08 fluctuating winter gas rate was its lowest winter rate since 2003. Jason Fulp, community affairs representative, said the company will re-evaluate its winter rates again this year.
According to the Missouri Department of Natural Resources, natural-gas futures are up 26 percent since last year. Propane prices are up 38 percent a gallon compared with last year’s figures. A gallon of propane last March was $1.66; this year, it is $2.29.
Melissa Dunson is the business writer for The Joplin Globe.


Gasoline

While it is not listed as a utility, many consider gasoline to be an essential part of life. A gallon of unleaded gasoline in Missouri cost an average of $2.39 last March. This year, that figure has gone up 69 cents, to $3.08. Diesel has spiked even more. The cost for a gallon of diesel is $1.26 higher than it was last March. Crude-oil prices are up 75 percent from a year ago. Crude-oil futures for May 2007 were less than $60 a barrel; they are more than $103 a barrel this year.
Source: Missouri Department of Natural Resources Energy Center

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