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Missouri Public Service Commission Signs Off Higher Natural Gas Rate

November 2, 2005
By: Katie Peterson
State Capital Bureau

JEFFERSON CITY-Central Missouri AmerenUE customers will pay approximately 18 percent more for their natural gas this month after the Missouri Public Service Commission signed off the higher rate effective Nov. 1.

AmerenUE Communications Executive Mike Cleary said the increased rate reflects the higher unregulated wholesale cost of natural gas. "All of this money goes to our suppliers to pay for the gas that we provide to our customers," Cleary said.

The Missouri Public Service Commission reviewed AmerenUE's rate adjustment case that was filed on Oct. 14. Spokesman for the Missouri Public Commission Kevin Kelly said, "The filing made by AmerenUE was thoroughly reviewed by the staff on the commission."

"We ensured that the case generally reflects the current market conditions as far as wholesale natural gas is concerned," Kelly said. The cost of natural gas from wholesale suppliers accounts for approximately 65-85 percent of a customer's bill, Kelly reported. Under Federal law, the Missouri Public Service Commission does not regulate the wholesale cost of natural gas.

Cleary said the average residential consumer in central Missouri can expect an increase of $21.86 per month, which compared to last winter rates is an increase of around 17.7 percent. Increased AmerenUE natural gas rates across the state range from 12-30 percent increases. These percentages are based on normal winter conditions.

According to Cleary, the wholesale cost has increased mainly due to supply issues from the oil and gas rigs being down or damaged from Hurricane Katrina along the Gulf Coast. Cleary reports the Gulf Coast accounts for 20 percent of natural gas production for the nation including some production for Missouri. Missouri also receives natural gas from Texas and Oklahoma Cleary said.

According to Cleary, it all depends on the weather as to how steep consumers will be effected by increase this winter. "Usage is a very big factor in how big your bill will be," he said.

In addition, the increased rate is subject to increase or decrease depending on the changing market prices from the natural gas suppliers. Cleary said AmerenUE is allowed to do up to three more filings with the Public Service Commission this year.

According to Cleary, the rigs being down along the Gulf is a temporary happening. "Eventually that damage will be repaired and those rigs will be producing again and that will help improve supply. That should cause prices to moderate somewhat," Cleary said.