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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