State regulators amend cold-weather rule

~ The revised rule lets customers regain service by paying up to 50 percent of overdue bills.

JEFFERSON CITY, Mo. -- State regulators on Tuesday made it a little easier for some Missourians to keep their homes warmer this winter by strengthening the safeguards in place for natural gas customers.

The action by the Missouri Public Service Commission was prompted by record high natural gas prices, which have caused more Missourians than last year to request help paying their heating bills.

"We're trying to help people cope with that," PSC chairman Jeff Davis said after the commission's 4-1 vote to amend its cold weather rule.

But utility representatives expressed concern that the rules intended to help customers could hurt their companies.

The new safeguards will apply to more than 1.2 million residential customers of investor-owned natural gas companies, which the PSC regulates. The state does not regulate the rates of municipal gas companies.

The cold-weather rule, effective every November through March, already prohibits utilities from disconnecting service to delinquent residential customers when temperatures are forecast to fall below 32.

It also includes other customer protections, such as the ability for those who previously defaulted on their payment plans to reconnect to natural gas service by paying up to 80 percent of their outstanding balance.

The revised rule, effective Dec. 26, would allow those customers to regain service by paying up to 50 percent of their overdue bills or $500, whichever is less. The rest still would have to be paid within 12 months, as is the case under the basic cold-weather rule.

The more lenient rules were sought by the Office of Public Counsel, the state's official consumer advocate, and also drew support from Gov. Matt Blunt.

The public counsel originally had proposed a payment threshold of 25 percent or $250 to reconnect to service -- the same levels approved by the PSC in October 2001 when it also amended its cold-weather rule because of rising natural gas prices.

But two utilities, Missouri Gas Energy and Atmos Energy Corp., successfully challenged the 2001 rule in court, winning a restraining order while contending the rule contained no guarantee that they would be able to recoup their costs of implementing the changes.

The PSC set a delayed effective date this year to allow time for utilities to decide whether to challenge the revised rule. This year's version says natural gas companies will be allowed to recover their costs of complying with the rule. That could mean higher bills for customers in the future.

But the trade group for investor-owned utilities said there are concerns about the particulars of how that would happen and how it would affect the utilities' bottom lines.

"The argument is over how you calculate what shows up on natural gas company books as bad debt, what percentage is reimbursable and when that is done," said Chuck Caisley, president of the Missouri Energy Development Association. The PSC rule change "is not what we were hoping for, and it leaves some serious concerns on the table because of the funding mechanism."

Commissioner Connie Murray, the lone dissenter in the approval vote, said she wasn't persuaded that an emergency exists for natural gas customers.

By reducing the amount of their outstanding bills that customers must pay to gain service, the state "allows ratepayers to become more indebted, and there is no guarantee they will be in any better shape next time," Murray said.

Additionally, if utilities increase customer charges to make up for losses, then "this is a hidden tax on other ratepayers," she said.

This year's cold weather rule revisions allow customers with overdue bills to enter a budget-billing plan, in which they can make equal monthly payments and thus spread the cost of their winter heating bills into the summer. If customers comply with their payment plans, interest and late payment charges will be waived and they will be held in good standing the following winter.

Several commissioners who supported the revised rules said they would have liked to have gone further in the consumer protections or stressed that more federal and state money is needed to help low-income people pay their heating bills.

---

On the Net:

PSC: http://www.psc.mo.gov