PSC staff says
gas pipelines overcharged area utilities
Apr 5, 2006 - St. Louis Post-Dispatch
Author(s): Jeffrey Tomich; St. Louis Post-Dispatch
The staff of the Missouri Public Service Commission says rates
charged by two natural-gas pipelines in the central and eastern parts of
the state are excessive and should be reduced by $3.8 million a year.
The charges are part of a complaint filed last week by the PSC staff
that asks the commission to cut the rates charged by Missouri Gas Co.
LLC and Missouri Pipeline Co. LLC and for authority to sue the St.
Peters-based company that owns the pipelines.
The complaint stems from an audit that showed rates charged by the
pipelines generated revenues that exceeded the cost of providing gas
transportation service plus a "reasonable" rate of return, said Bob
Schallenberg, director of the PSC staff's utility services division.
The pipelines are used to move natural gas within the state for
utilities including Laclede Gas Co., AmerenUE and several municipal
utilities in St. Robert, Cuba, St. James, Waynesville and Fort Leonard
Wood. The impact on individual customers has not been determined.
Rates charged by the pipeline operator are paid upfront by utilities
and other wholesale customers, but they're ultimately passed on to
retail customers already coping with high winter bills.
The owner of the pipelines is Gateway Pipeline Co. LLC, according to
an organization chart of the company's Web site. The company's
president, David Ries, didn't return a message left at the company's
office in St. Peters.
The complaint cites some of Ries' travel expenses and salary that
were "unreasonable or inappropriate," as well as costs to maintain
offices in Colorado for a sister company, R2 Development.
The staff of the PSC doesn't have authority to regulate utilities or
enforce rules, but acts as an adviser to the five-member commission. The
pipeline companies will be given a month to answer the complaint and
possibly negotiate a settlement before the case is heard.
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