Average residential bill could increase by $228 per year, company says

Last updated: June 10. 2014 2:58PM - 392 Views
By Pat Pratt ppratt@civitasmedia.com

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Customers in the Warsaw service area will have a chance to voice concerns regarding a proposed 26.5 percent rate hike by Summit Natural Gas during a public hearing to take place at noon Tuesday at the Warsaw Public Library.

The company filed a request with the Missouri Public Service Commission (PSC) in January for approval of the approximately $7.5 million annual revenue increase. The increase will affect customers in the Warsaw, Branson, Gallatin and Rogersville area. The increase does not affect customers in the Lake of the Ozark service area.

The average residential customer in the Warsaw service area could see an increase of $228 per year, according to the company.

Julie Rowey, director of marketing and communication for Summit Natural Gas of Missouri, said the rate increases are the first the company has sought to enact in the affected service areas since 2008.

“The rate increases are essentially to cover the cost of providing service to our customers,” Rowey said. “We haven’t had a rate increase since 2008 for the territory that was formerly served by what was called the Missouri Gas Utility. Then, we have not had a rate increase since 2011 for Southern Missouri Natural Gas Company.”

As Summit provides natural gas to more rural areas, the cost of maintaining and constructing delivery methods is considerable, Rowey said. The money garnered by the increases will help the company recoup expenses on investments made over the last several years.

“This recovers all of our infrastructure and improvements we’ve made by building new facilities, upgrading existing facilities, the increased costs of expenses, property taxes and all of those things,” Rowey said. “We’ve invested a significant amount into the system, since that time and this is to bring us current.”

In Missouri, Summit Natural Gas has 24,000 customers. Of those, 1,248 customers are in the Warsaw service area and 962 of the Warsaw base are residential customers. Many of those customers are irked by the rate increase, as evidenced by comments already submitted to the PSC, claiming utility bills are already too expensive and the increase is not necessary.

Summit Natural Gas said the increase has nothing to do with the cost of fuel, which have fluctuated wildly on the open market from lows in the $8 range to highs in the $26 range over the past decade. Natural gas prices and trends are monitored and reported by the U.S. Energy Administration Center and can be found at eia.gov/naturalgas.

“There are two separate cost components,” Rowey said. “The commodity cost will fluctuate, but the one thing to note is that the commodity cost is a pass through cost so we do not mark it up. We adjust that cost annually. So the components of this rate increase are not really about the commodity cost, it’s more about the distribution costs.”

Before a regulated utility increases a rate, it must file a request with the PSC. This does not apply to municipal utilities and the rules are different for telecommunications companies. The PSC will then set a schedule of public comment opportunities and hearings. It must decide on the case within 11 months.

The PSC staff public information/question and answer session will start at noon at the library located at 102 E. Jackson St., in Warsaw, with the taking of sworn statements to follow. Any person who needs additional accommodations to participate in this hearing should call the Public Service Commission’s hotline at 1-800-392-4211 (voice) or Relay Missouri at 711 before the hearing.

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