Judge halts PSC rule change

Wednesday, November 28, 2001

Rhonda Schafer of Jackson, Mo., fears if she can't get her natural gas turned on soon, she will be forced to close off part of her house and live in a few rooms warmed by electric heaters.

She and her husband were among hundreds of people in the state whose gas service was cut off in the spring because they were unable to pay high bills from a frigid winter.

Schafer hoped a revised cold weather rule approved by the Missouri Public Service Commission would force United Cities Gas to reconnect her service this month. Instead, Cole County Circuit Judge Thomas Brown on Tuesday a temporary stay to changes to the rule.

United Cities Gas is a subsidiary of Atmos Energy Corp.

The Missouri cold weather rule is in effect from Nov. 1 through March 31 each year. It prohibits disconnections when temperatures drop below 30 degrees.

The rule changes, which went into effect Nov. 18, require utilities to reconnect customers who pay 25 percent of their delinquent tab or $250, whichever is less. They also give customers 18 months to pay their delinquent balance instead of the 12 months formerly allowed.

When Schafer called the gas company, she said customer service told her she would have to pay a $244 deposit in addition to her $220 bill. If the temporary stay weren't in effect, she could be reconnected for as little as $61, which she could afford.

"It's starting to get cold, and that's worrisome for the people who have children," said Schafer, who works in Cape Girardeau. "At least it's just me and my husband."

United Cities Gas officials did not return phone messages left Tuesday.

Possibility of loss

The utilities challenged the revised rule because it only allows for the possibility -- and does not guarantee -- that utilities will be able to recoup costs from last winter. Gas bills were double or triple normal amounts due to lower inventories and a volatile market.

In issuing the stay, Brown said he was concerned about how the PSC approved the rule. "There are a lot of questions I have about the process," said Brown, who scheduled a Dec. 20 hearing to consider a permanent stay.

An attorney for the PSC said Brown's decision could tie up the case through March 31 when the new rule expires, meaning it would have no practical effect on the utilities.

If the stay is made permanent, the case could find its way to the Missouri Court of Appeals for the Western District.

Missouri Gas Energy serves about 500,000 customers in the Kansas City area and western Missouri while Atmos serves about 110,000 customers in parts of northeast and Southeast Missouri.

Other utilities subject to the rule were not affected by Brown's ruling since they have agreed to comply.

The St. Louis Post-Dispatch reported Tuesday that Laclede Gas Co. had agreed to observe changes in the cold weather rule and had received several hundred calls since Nov. 19 from people wanting to take advantage of the rule changes. A Laclede spokesman said about 300 wanted to make payments for reconnection.

Winter approaching

Utility regulators say the rule changes are needed because, with winter approaching, an unusually high number of people already lack heat or face disconnection because they have not paid last year's bills.

Rob Hack, an attorney for Missouri Gas Energy, said implementation of the rule would cost the utility $2.3 million over a six-week period, and changes to computer billing would take months to complete.

"We think that is a serious waste of resources," Hack said. "If we don't get that money up front, the likelihood that we'll recover that money is low."

Officials for Atmos said the rule change would cost the utility more than $350,000.

Eric Anderson, an attorney for the PSC, argued that the utilities would have an opportunity to recover the money and that they had failed to show any long-term financial losses.

"There's a deferral of revenue, not a loss," Anderson said. "We are talking about money. The court has to balance that with the public interest. Money is not enough to show irreparable harm."

The Associated Press contributed to this report.


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