Natural gas customers for Spire, formerly Laclede Gas, will see a rate change this month that could lead to some savings.
The Missouri Public Service Commission has approved changes to the company's rate structure that are expected to reduce customers' bills approximately 5 percent, or an average of $2 per month.
Spire says this means costs will be less today than 10 years ago, and that other changes to the rate structure will help customers.
A consumer watchdog group says the natural gas company's original intention was to raise rates, and other changes to the rate structure will make costs less predictable for customers.
The change comes after a rate case, which started more than a year ago before the Missouri Public Service Commission, required a full audit.
All rate cases in front of the commission include an audit and litigation, so this was not unique to this case, said Jenny Gobble, manager of external communications for Spire.
Spire originally requested an increase of $3.31 per month for the average residential customer in the company's eastern territory of Missouri, according to Cara Spencer, executive director for the Consumers Council of Missouri.
This is the third full rate case audit in a row that resulted in some reduction for the Laclede Gas area, said John Coffman, of the Consumers Council. The council successfully fought state legislation two years ago that would have prevented this rate case from happening, he said.
The new rate order may have reduced average customer bills, according to Spencer, but it also granted a high profit level and a weather adjustment to Spire. A surcharge meant to cover system replacement will also continue to grow, she said.
Spire received a 9.8 percent profit level, after PSC auditors recommended a profit allowance of 9.25 percent, Coffman said. This dispute was worth several million dollars per year, he said.
Prior to the rate case, the Office of Public Council filed a complaint about Spire earnings, said Gobble.
"During this case, the Public Service Commission did a thorough investigation and found no evidence to support that claim," she said.
The PSC agreed with experts that a 9.8 percent return on investment is in line with the national average for natural gas utilities, Gobble said.
A weather adjustment approved by the PSC will expose customers to future rate increases when Missouri experiences a warmer than normal winter, said Spencer. The Consumers Council will continue to fight this rate mechanism, she said.
"In my opinion, the new 'weather-tax' makes it even easier for the effects of weather to be passed along to ratepayers, making rates less predictable, while shielding the utility from that risk," said Coffman.
The new weather adjustment replaces a smaller, agreed-upon rate mechanism that had some similarities, he said.
Missouri winters can be unpredictable, contends Gobble.
"The new adjustment helps level out the amount customers pay during the year for their natural gas services, based on normal -- instead of actual -- temperatures," said Gobble. "If it's a colder or warmer than normal winter, you'll see a rate adjustment on future bills."
Spire officials say the company has been able to upgrade hundreds of miles of pipeline across the region due to the recent growth of the company and federal tax reform.
"In the last five years, Spire has grown through acquisitions of natural gas utilities in Missouri, Alabama and Mississippi," the company reported in March. "Spire's growth into the nation's fifth-largest publicly traded gas utility has resulted in more than $70 million in annual savings for Missouri natural gas customers."
These savings are passed along to customers as part of this rate case, according to Spire.
The timing of this rate case was dictated by Missouri law, which says that if a utility uses the infrastructure system replacement surcharge to raise rates between rate cases, it must have rates reset every three years, Coffman said.
Key to understanding the decreasing costs for Spire is a merger and acquisition in 2013, he said. Laclede acquired Missouri Gas Energy and rebranded as Spire.
"The merger has led to declining costs, but without this recent rate case, those cost savings would not have been passed along to customers," Coffman said.
The delivery rates determined in this case make up about half of the typical residential bill, Gobble said. The remaining half of the bill is the cost of gas that is passed on to customers with no mark up, she said.
New rates
Customer charge: $22 (includes system replacement charge)
Winter billing: .23330-cents per therm (November-April)
Summer billing, first 50 therms: .20994-cents per therm (May-October)
Summer billing, over 50 therms: .25435-cents per therm
Old rates
Customer charge: $23.44 (includes system replacement charge)
Winter billing, first 30 therms: .91686-cents per therm
Winter billing, over 30 therms: 0
Summer billing, first 30 therms: .31290-cents per therm
Summer billing, over 30 therms: .15291-cents per therm