Natural gas costs up in Missouri

Wednesday, September 19, 2001

JEFFERSON CITY, Mo. -- Missourians can blame last winter for the higher natural gas rates they paid this spring and summer, state utility regulators said Tuesday.

Residential customers in Missouri were paying higher natural gas rates than residents in most neighboring states, according to federal statistics for May, the latest month available.

That trend likely continued through the summer, said Warren Wood, energy department manager for the Missouri Public Service Commission.

"It's not surprising that we had some rates that are higher than some of our neighbors right now, because we had rates that were lower than them in some of the higher winter usage months," Wood said.

Missouri's rates were lower this winter than all neighboring states except Arkansas, he said.

In May, Arkansas had the highest residential natural gas rates in the nine-state region, followed by Kentucky and then Missouri.

Arkansas' average residential rates were $13.98 per 1,000 cubic feet of gas, Kentucky's were $13.35 and Missouri's $12.87. Residents in Nebraska were paying the lowest regional rates at $9.20 per 1,000 cubic feet of gas.

The figures, compiled by the federal Energy Information Administration, were presented Tuesday to people attending the Utility and Energy Conference sponsored by the Missouri Chamber of Commerce.

About 60 percent of Missouri households use natural gas for their heating systems, according to the state Department of Natural Resources' Energy Center.

Residential rates are based largely on the wholesale price of natural gas, but also include such costs as administrative and transportation charges.

A higher demand, caused by a colder than usual winter, and a shorter supply of natural gas combined to force up rates this past winter.

Several of Missouri's largest utilities requested an emergency rate increase, which the state Public Service Commission approved. But the rate increases came after the utilities already had sold large quantities of gas at prices below what they had paid for it, Wood said.

Consequently, many Missouri utilities were still recovering their losses this spring and summer, he said.

Missouri allows utilities to propose rate changes just twice a year with an option for one emergency change. Some other states allow more frequent changes, so their winter retail rates were able to respond more quickly to the wholesale price spikes.

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