Spire will increase its rates for natural gas customers in Joplin and Southwest Missouri before the year is out.
The Missouri Public Service Commission recently approved the increase, which authorizes the natural gas distributor to raise its revenues by $78 million, with new rates to take effect between Dec. 26 and Jan. 1.
The typical residential gas customer in Western Missouri, defined as someone using 1,000 cubic feet of natural gas per month, will see their monthly bill increase by 4.9%, or $4.76 per month, said Jason Merrill, spokesman for Spire.
Spire had sought a net increase in revenue of nearly $152 million when it filed with regulators last April. Under that original proposal, the typical customer in western Missouri would have seen an increase of $10.95 per month, or 12.65%.
The agreement was submitted by Spire, the staff of the PSC, the Missouri Office of the Public Counsel, which represents consumers, the Consumers Council of Missouri, and others. No party objected to the agreement.
“After reviewing the unopposed agreement, the commission determines that its terms are a reasonable resolution of the issues therein and will result in just and reasonable rates,” commissioners said in a statement.
For Spire West residential customers, including those in the Joplin area, the monthly customer charge will stay the same at $20 a month. However, the current winter usage charge (November through April) will go from 27 cents to 37.4 cents per ccf.
This rate case covers “non-gas” costs for Spire customers, which the PSC defines as operating and maintenance expenses, and recovery of investments the company has made, such as new lines.
The actual cost of the natural gas is not a part of this rate case.
Gas costs
The cost of the natural gas itself for residential and business customers in Southwest Missouri also is going up this winter.
Last month, the PSC announced that the half-million Spire West customers who had been paying 79 cents per ccf of natural gas will see that rise to 92 cents per ccf. Those rates took effect Nov. 29.
A ccf is a hundred cubic feet of natural gas and a unit to measure usage, and how much more each customer will pay will depend on their usage through the winter.
“This breaks down for the average residential customer to an average monthly bill increase of $8.14, or 9.16%,” said Merrill.
According to the PSC, the increase is due to increases in the wholesale cost of natural gas as well as a change in the company’s Actual Cost Adjustment factor, which tracks any over-collection or under-collection of actual natural gas costs over a 12-month period. The net over- or under-collected balances are subsequently either refunded or collected the next year.
The cost of natural gas from wholesale suppliers makes up about 50% to 55% of a customer’s monthly natural gas bill, Merrill said.
In its statements, the PSC said the wholesale cost of natural gas is not regulated by the state, and that cost is “primarily driven by supply, demand and the weather.” The PSC does conduct a review to make sure that regulated natural gas companies such as Spire make prudent decisions in securing natural gas supplies for their customers.
This follows an announcement in November 2021 when Spire West customers saw the cost of gas double, going from 40 cents per hundred cubic feet of natural gas used to 79 cents. That jump reflected the price increase that the natural gas market has experienced starting with a severe weather event in February 2021, according to Spire officials, when gas traded at $200-$600/MMBtu compared to normal prices in the $2-$6/MMBtu range. An MMBtu represents 1 million British thermal units and is a way natural gas is measured for financial contracts.
That change meant an increase of about $24.36 per month, or 41.5%, for the typical natural gas residential customer, defined as someone who uses an average of 60 to 65 ccf per month.
Spire West customers are those on the western side of the state, including customers in Barry, Barton, Jasper, Lawrence, McDonald and Vernon counties.
Other changes
Under the agreement, Spire also will change the name of its Low-Income Energy Affordability Program to the Payment Partner Program, and will increase shareholder contributions to the program by $1 million in addition to existing contributions, bringing the total funding of the program to $3.3 million. In addition, eligibility for the Payment Partner Program will be expanded to 300% of the federal poverty level through April 30.
Merrill encouraged customers to talk to Spire about their eligibility for assistance.
Beginning on May 1, 2023, absent an alternative agreement by the Spire Limited Income Collaborative, the eligibility for the program will change to 80% of the median income of Missouri residents, which is consistent with the state’s guidelines for Low Income Home Energy Assistance Program eligibility.
According to the Consumers Council, which intervened in the case on behalf of Missouri consumers, Spire also will provide an additional $500,000 (funded equally by ratepayers and shareholders) to its Critical Needs Program, which is designed to protect customers who are seriously ill from gas service disconnection.
