Laclede Gas Co. has asked for regulatory approval from the Missouri Public Service Commission to initiate a “weather clause” that it says would protect its 633,000 natural gas customers from weather-related fluctuations in their bills and would stabilize the company’s annual revenues.

The St. Louis-based company filed the plan with the PSC on Friday to mitigate weather effects by basing a portion of the customers’ winter bills on usage associated with normal weather and adjusting the bills to offset the impact of temperatures that are colder or warmer than normal. Laclede’s current gas distribution rates are tied directly to weather, and its revenues increase or decrease depending on colder or warmer than normal temperatures.

“We are looking for ways to reduce the volatility in customers’ bills, which hit home in very clear terms during this past winter,” said Richard Hargraves, director of corporate communications. “We were faced with a combination of unseasonably cold winter weather and sharply higher wholesale gas costs. So customers were using much more natural gas to heat their homes, while higher wholesale gas prices were being passed through to customers.”

Weather clauses are used in other parts of the country. A survey by the American Gas Association estimates up to 40 natural gas utilities in more than 20 states and Canadia have weather clauses. Hargraves said some companies have had weather clauses since 1980 but the average time companies have been operating under weather clauses is about eight years.

The weather adjustment would apply to Laclede’s distribution costs for residential, commercial and industrial customers. It would not affect wholesale gas costs, which would remain covered by Laclede’s Purchased Gas Adjustment. The PGA passes through to customers the increases and decreases of wholesale gas costs.

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