COMPANY PROPOSES HIKE IN GAS PRICES

Southeast Missouri residents will get a chance to sound off to the Missouri Public Service Commission about AmerenUE's request for a 14 percent increase in natural gas rates.

The PSC plans to hold a public hearing in Cape Girardeau on Aug. 24, one of five scheduled around the state to solicit opinions on the proposed increase. The hearing is scheduled for 6:30 p.m. in the Osage Community Centre.

Staff from the PSC will be available an hour before the start of each of the hearings to answer questions from the public.

The local hearings are scheduled in areas that receive natural gas service from AmerenUE.

"Local public hearings give customers an opportunity to appear before the commission and comment on the rate case and bring any service-related problems to the commission's attention," said PSC spokesman Kevin Kelly.

AmerenUE has 106,000 commercial and residential natural gas customers in Missouri, including 19,400 in Cape Girardeau, Stoddard and Scott counties, and another 2,000 in Butler and Bollinger counties, and the city of Advance.

The proposed new rates would generate an additional $12 million in annual revenue, the PSC and utility officials said.

The proposed rate hike comes on top of another increase in monthly charges. The commission earlier this week hiked gas charges at the request of AmerenUE. The utility company said the rate increase was needed to cover the escalating cost of purchasing natural gas from its suppliers.

The increase will take effect Monday and remain in effect through October when the company will file for a winter adjustment to reflect the cost of buying natural gas over the winter months of November through March.

Utility companies file for rate adjustments in October and April to cover the cost of buying gas. A third filing is allowed during the winter, if needed.

AmerenUE spokesman Mike Cleary said it is unusual for the company to seek a summer rate adjustment. Cleary said there are three costs in providing natural gas to customers: the cost of the gas itself, transporting it through the pipelines and the cost of operating the local gas systems.

The cost of the gas itself isn't regulated and fluctuates with the market. Transportation and local operations charges are regulated, he said.

Cleary said there currently is high demand for gas and a limited supply. "Lots of companies are using gas to generate electricity these days," he said.

"Gas is in demand year-round, and that is what is driving the cost up," said Cleary. Wholesale gas prices are at their highest in history, he said.

But gas prices previously were low, which discouraged gas companies from exploring for gas and drilling more wells. As a result, supply hasn't kept up with demand, Cleary said.

"Right now natural gas is almost double what it was last year at this time," he said.

Wholesale gas prices account for over half of a customer's total bill, excluding taxes.

For gas customers, winter could be expensive. Monthly bills could jump by 25 to 30 percent. That doesn't include the rate increase currently being considered by the PSC.

If the PSC grants AmerenUE's pending increase in rates, Southeast Missouri residential customers could be seeing gas bills of over $100 a month this winter when usage is highest, Cleary said. The average winter bill in this area was just over $73 a month last year.

In Cape Girardeau, Scott and Stoddard counties, gas bills average $18.45 a month for residential customers during August, September and October. Under the rate hike approved this week, the monthly bill would jump to $22.17, an increase of $3.72 a month.

In Butler and Bollinger counties and Advance, the average monthly bill would climb to $18.71, a $3.38 increase, Cleary said.

The differences reflect the fact that different areas are served by different suppliers and pipelines, he said. AmerenUE's various gas systems aren't interconnected, Cleary said.

AmerenUE has various rates for business customers, making it difficult to come up with an average business charge, he said.

The current rate-hike request reflects AmerenUE's higher costs of constructing, operating and maintaining its gas distribution system, company officials said.

AmerenUE officials said the company needs the increase because its total investment in its gas utility system has gone up by more than 20 percent since the company filed for its last general-rate adjustment three years ago.

SCHEDULE OF HEARINGS

Public Service Commission public hearings on proposed increases in the cost of natural gas:

* Cape Girardeau, Aug. 24.

* Wentzville, Aug. 21.

* Columbia, Aug. 28.

* Jefferson City, Aug. 29.

* Mexico, Mo., Aug. 31.

Formal hearings are scheduled for Oct. 30 through Nov. 3 before the PSC in Jefferson City.