Missouri Gas Energy customers can expect to see lower bills

Saturday, October 25, 2008 | 9:52 p.m. CDT

KANSAS CITY — At least 400,000 Missouri Gas Energy customers can expect to see a reduction in the cost of natural gas, and the utility said it will review the level-payment bills of 100,000 others.

Those not on the level-payment plan will start seeing reductions in the cost of natural gas in November, the Kansas City-based utility announced Friday.

The 100,000 customers enrolled in the budget bill plan won't see changes until January. However, such bills normally would not be altered until March and the utility previously said it wouldn't make changes before then.

The program, which spreads natural gas charges out over time to create a level monthly bill, is meant to help customers manage often-volatile utility bills. The utility generally adjusts rates twice a year to account for changes in usage as well as the expected cost of gas.

When the utility adjusted the bills in July, natural gas prices were at their high for the year at $13.31 per 1,000 cubic feet. But since then, natural gas prices have fallen by more than half, as part of a broad sell-off in commodity markets. They reached their lows for 2008 this month.

The utility said Friday that the level-payment plans will be reviewed in December and any adjustment will be reflected in January's bill.

"I would anticipate many people will see a decrease," said Jason Fulp, a spokesman for MGE, although he added that gas use would also affect the bill.

Any adjustments can't be made until January because of the logistics of reviewing the level-payment plans of 100,000 customers, he said.

The utility's 400,000 other customers will see the cost of gas decline by 9 percent starting in November, saving an average residential customer about $100 for the winter.

Still, Missouri regulators warned that the utility's customers would probably pay more for heating this winter than last winter. But instead of the hundreds of dollars more expected in July, the extra cost now is estimated at $77 for the season.

MGE and other utilities had already bought some of their gas for this winter at the higher prices, and those costs will be recovered from customers.

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