Utilities will waive gas reconnection fees under Blunt assistance plan

Saturday, October 22, 2005

Tax dollars otherwise spent on reinstating service will instead go toward fuel to heat homes.

Tax dollars spent to help low-income Missourians with utility bills will be used to pay for fuel rather than for deposits and reconnection fees, Gov. Matt Blunt announced Friday.

In a move that mirrors an effort announced in Illinois on Oct. 11, utilities in Missouri will waive reconnection fees and deposits from customers receiving help through the Low Income Home Energy Assistance Program.

The assistance program, also known as LIHEAP, began accepting applications for help on Oct. 1. The program locally is directed by the East Missouri Action Agency.

The announcement comes a week before natural gas rates are expected to rise dramatically for most customers. In Cape Girardeau, AmerenUE gas rates will likely be 42 percent higher beginning Nov. 1 than they were last year.

The higher costs stem from escalating wholesale natural gas prices. Utilities are allowed to pass on higher costs for gas but do not make a profit on the increased costs.

"The action we have taken today will bring relief to Missourians who need assistance with what will likely be very high home heating bills," Blunt said in a prepared statement.

The agreement to waive the reconnection fees and deposits came after negotiations between the Missouri Public Service Commission and the Missouri Energy Development Association, which represents private utility companies.

The PSC estimates that the average heating bill for natural gas customers will be 50 percent higher this winter than last year. Approximately 57 percent of Missouri homes heat with natural gas.

To help monitor the cost increases, Attorney General Jay Nixon Friday asked seven gas retailers to provide information about projected wholesale prices and demand for the coming winter. The information Nixon is seeking, along with attorneys general from four other states in the region, include the cause of price hikes, measures being taken to reduce the impact of higher prices on consumers and internal measures being taken by the utilities to control prices.

The information will be used to develop methods of protecting energy consumers, including possible changes in regulation, programs to protect low-income consumers, education and litigation, Nixon said in a prepared statement.

The rate increases expected Nov. 1 coincide with the beginning of a five-month period when the PSC's Cold Weather Rule is in place. Under the rule, utility service cannot be shut off if the temperature is forecast to drop below freezing.

The rule allows low-income elderly or disabled customers to register with utilities and pay only 50 percent of new charges to keep service connected. For other customers, the rule allows overdue charges to be paid over an extended period, prevents utilities from charging a deposit if payment agreements are kept and allows reconnection of utilities for less than the full bill amount.

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