As a result of recent major investments in the infrastructure of its natural gas business and rising operating expenses, Ameren Corp. subsidiary AmerenUE said Friday it has filed a request with the Missouri Public Service Commission (MoPSC) for an $11 million increase in natural gas delivery rates for its approximately 125,000 Missouri gas customers.
Since delivery rates account for only about one-third of residential customers’ total natural gas bills, AmerenUE’s proposed increase of 18.3% in delivery rates would result in an increase in total gas revenues of about 6.4%. For a typical residential customer, AmerenUE’s request would mean an average increase of about $6 per month, excluding taxes. However, the company said the request will not have any immediate effect on customers’ gas bills, since it must first go through the process of MoPSC review and hearings. A decision is expected no later than June 2007.
In its rate filing, AmerenUE said it is seeking to recover expenses associated with more than $40 million of investments in gas system improvements and expansions designed to improve service reliability and keep pace with growing customer needs. Improvements include significant replacement of old cast iron mains and unprotected steel service lines that have been completed since AmerenUE’s last gas rate case in 2003.
“Since July 1, 2003, AmerenUE has replaced about 70 miles of old cast iron and unprotected steel gas mains and more than 3,300 service lines with modern polyethylene pipe, largely to comply with state regulations,” said Gary L. Rainwater, CEO of Ameren Corp. “In addition, we have added about 215 miles of new gas mains and more than 10,000 service connections to accommodate new growth. AmerenUE customers are receiving the benefits of these expenditures, but current rates do not reflect these higher costs.”
The remaining portion of customers’ gas bills consists of the purchased gas adjustment (PGA), which reflects the commodity cost of natural gas from the company’s suppliers. In its rate filing, the company is also seeking to equalize the way the PGA is calculated for all its customers. Presently, the PGA differs among the four different geographic regions of Missouri where AmerenUE provides gas service, due to differences in pipeline suppliers in these areas.
“This change is designed to benefit all of our customers by creating a common PGA rate applicable to all AmerenUE gas customers. The purpose is to more effectively integrate our centralized gas purchasing and price-hedging strategies that are designed to reduce price volatility in the cost of gas from our suppliers,” Rainwater said.
The Ameren companies serve 2.4 million electric customers and nearly one million natural gas customers in a 64,000-square-mile area of Missouri and Illinois.
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