Missouri Gas Energy moves to reduce natural gas rates

Kansas City-based natural gas distribution company Missouri Gas Energy, which has facilities in Joplin, Republic, Neosho and Monett, has made the first step toward reducing its rates.

MGE, a subsidiary of Houston, Texas-based Southern Union Co. (NYSE: SUG), on March 17 filed with the Missouri Public Service Commission to reduce its cost of gas, or the wholesale price of natural gas added with interstate transportation and storage costs.

Currently, MGE's cost of gas is 79 cents per 100 cubic feet, but it would like to drop the price down to 72 cents per 100 cubic feet, according to a news release.

If approved, the price reduction would directly affect the bills of the company's more than 500,000 customers in 155 western Missouri communities.

"Obviously (bills) are going to be lower, but they're probably going to be lower anyway because we're headed into spring and summer," said Jason Fulp, MGE external communications and marketing representative, noting he was unsure just how much the rate change would affect the typical customer's bill.

MGE's cost of gas - reflecting the cost MGE pays to purchase gas on the open market, plus transportation and storage expenses - is paid for directly by customers.

The cost of gas represents up to three-fourths of a customer's winter bill.

"We purchase the gas on behalf of the  customers, and we resell it to them at the cost that we pay for it," Fulp said. "That's the biggest part of their bill, but that's not the only part of their bill."

The reduction request was made to address the market price of wholesale natural gas and interstate pipeline, transportation and storage fees.

"Natural gas prices are low," Fulp said, adding that this is typical of seasonal changes.

Southern Union Co. shares were trading at $28.38 as of 9:05 a.m., compared to a 52-week range of $20 to $29.24.[[In-content Ad]]