Ameren UE, Columbia’s biggest supplier of natural gas, wants to raise its prices starting next month.
The price increase, now awaiting approval by the Missouri Public Service Commission, comes in response to the rising cost of natural gas from suppliers.
Ameren’s request follows a national trend, according to Kevin Kelly, PSC spokesman.
The Energy Department predicts that heating costs for homes using natural gas or fuel oil could be 16 to 25 percent higher than last year. That estimate came before the latest price spike in crude oil and natural gas. The Energy Information Administration estimates that natural gas could cost more than $10 per 1,000 cubic feet by January, about 30 percent more than it did this summer.
“Current natural gas market prices are at their highest level ever for this time of year,” said Kelly. “That is of great concern to us at the Missouri PSC because it will affect natural gas customers this winter.”
While the market determines the price that suppliers can charge a company like Ameren, the government regulates how much a utility company can charge its customers, said Ameren spokesman Mike Cleary.
There are several reasons behind the proposed price increase, he said. First is the increasing cost of crude oil. Natural gas and crude oil are produced in the same way and at the same locations. Hurricane damage, too, was cited as a cause for higher prices.
Ameren last raised prices through what’s called a Purchased Gas Adjustment on Nov. 1, 2004. At that time, says Cleary, prices rose an average of $7.59 during the peak heating season, from November through March.
Cleary said the increase will only cover the amount Ameren pays its suppliers.
“We don’t make any profit when the price of gas increases,” said Cleary, “We charge for the distribution and delivery of the gas.”
The prices will go up just as the region enters fall and winter heating season, when customer demand is at its highest, It is the PSC’s job to protect those customers, Kelly said.
“Each year we do a thorough review of each of the local gas companies in our jurisdiction,” Kelly said. “We review their purchasing practices to ensure they’re making prudent decisions in the purchasing of natural gas for their customers.”
The PSC will have to review the request before it can determine whether to approve it, Kelly said. That review process hasn’t begun, but he said the PSC will act on Ameren’s request before Sept. 1.
The Associated Press contributed to this article.