An agreement to settle a Missouri Gas Energy rate change will modify the company’s various rates, but the net bill to consumers will remain largely the same, according to statements released Thursday by the gas company and the state’s utility regulatory agency.
Customers will see a 23-cent reduction in the monthly delivery charge for gas, from $28.10 to $27.87 during warm months from May through September. In October, the delivery charge will be split into a $23 fixed charge and an additional variable delivery charge that will be based on the customer’s use. That variable rate is 7.38 cents per 100 cubic feet of gas used.
The net effect, the company said, is that the revenue from the base rates will increase by $7.8 million, but revenues from the company’s infrastructure system replacement surcharge will decrease by that amount.
Additionally, the agreement will add some services to help low-income residents with higher winter bills, such as provisions for winterizing houses or providing minor repairs to pipes or appliances that will help make the service more efficient.
A one-time energy affordability program also will be in place to help low-income customers catch up on their bills after this winter, which MGE said involved record low temperatures. MGE also lists rebates on its website that are available for the purchase of new, energy-efficient appliances, along with other usage reduction measures.
“We appreciate all of the efforts in the give-and-take of negotiations to reach a reasonable agreement that’s consistent with our shared interest in delivering safe and reliable natural gas service for customers efficiently and cost effectively,” said Steve Lindsey, president of Missouri Gas Energy, in a statement.
In its initial request, MGE had asked to raise the residential customer charge from $26.88 to $40.95 for the months of November through March and then lower it to $22.31 for April through October. That would have had the effect of raising rates about $2.33 a month.
The Office of the Public Counsel, which represents consumer interests, asked the Missouri Public Service Commission to lower the company’s customer charge to $16.50 a month year-round and add a volume-based rate of 16.49 cents for every 100 cubic feet of gas used. Under the agreement, the volume-based rate of 7.38 cents is less than half that proposal.
A Joplin resident, Vicki Dvorak, said at a February hearing conducted in Joplin on the company’s rate request that approving a rate that is based on a customer’s volume of use “would be a little more fair to the people who use less gas.”
John Joines, head of the Economic Security Corp. and the Jasper County Public Housing Agency, testified at that hearing that any increase in the rates would hit the low-income residents the agencies serve particularly hard. Utilities cost about 14 percent of the incomes of those residents, while people with higher incomes spend 3 to 6 percent of it on energy costs, Joines said.
On Thursday, Joines hailed the agreement as a plus for those he serves.
“I am very encouraged that the PSC has decided to make such a decision,” he said.
The agreement was approved by the Office of the Public Counsel, the PSC staff, MGE, the Missouri Department of Economic Development-Division of Energy, and the Midwest Gas Users’ Association.
MGE IS OWNED by Laclede Gas Co., a subsidiary of The Laclede Group, and has 1.13 million customers.