The Missouri Public Service Commission approved the unanimous settlement reached in the rate case filed by Laclede Gas in December, authorizing a $38.6 million annual increase in base rates effective Aug. 1.

Customers are already being billed for $5.5 million of the amount in the form of an infrastructure system replacement surcharge.

Under the settlement, which was approved Thursday, Laclede’s typical residential customer will pay an additional $2.45/month, or 2.6% for the initial annualized period, after an estimated $12 million credit to customers associated with income from Laclede’s off-system sales of natural gas and upstream pipeline capacity. The new rates will apply throughout the Laclede system, including its Missouri Natural operating division and the former Fidelity Natural Gas service area.

The increased rates will assist Laclede in covering increased costs to operate and maintain its 16,000-mile distribution and storage system through which it distributes gas to approximately 631,000 customers. The company last received a general rate increase in 2005. The settlement also enhances Laclede’s current weather mitigation rate design, making the company’s recovery of costs less dependent on the volume of gas sold.

These modifications will allow Laclede to enhance and expand its customer conservation and energy efficiency programs while also maintaining its financial standing, the company said. Laclede will work with others to design additional programs that assist customers in saving money through conservation and energy efficiency while supporting national efforts to reduce energy usage overall.

The company will also increase funding of its weatherization program to $950,000 annually and invest up to an additional $3.5 million in various energy efficiency and alternative energy programs over the next three years. Laclede said it will also continue to invest up to $600,000 annually in a low-income energy assistance program.

The settlement continues the process of sharing net revenues with customers from off-system sales of gas and upstream pipeline capacity. On average, the company will retain 20% of the first $6 million in annual net revenues and 30% over $6 million each year. Remaining amounts will go to customers. Beginning in November, Laclede’s purchased gas adjustment rates will be reduced to reflect customers’ share of gains realized from off-system sales of gas and release of pipeline capacity, including a one-time credit of approximately $6 million to be distributed in the first year only related to the customers’ share of such gains during the past two years.

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