Appeals Court Upholds Laclede Gas Company's Position on Its Price Stabilization Program

Mar 02, 2005, 00:00 ET from Laclede Gas Company

    ST. LOUIS, March 2 /PRNewswire-FirstCall/ -- The Missouri Court of
 Appeals, Western District, yesterday affirmed a Circuit Court ruling upholding
 Laclede Gas Company's retention of a portion of the benefits it generated from
 a Price Stabilization Program effective during the heating season of 2000-
     The Court of Appeals concluded that the tariffs at issue authorized
 Laclede Gas to retain $4.9 million of the $28.5 million in net gains it had
 generated, most of which benefited Laclede's customers by reducing their cost
 of natural gas. Laclede Gas had previously recorded this $4.9 million as
 income during fiscal year 2002.
     In April 2003, the Missouri Public Service Commission ruled that Laclede
 should not be allowed to retain the $4.9 million, and the utility appealed the
 decision to the Circuit Court of Cole County. The Circuit Court upheld
 Laclede's position in a November 5, 2003 ruling. The Commission appealed the
 Circuit Court's decision to the Missouri Court of Appeals. Yesterday's
 appellate court ruling affirmed the Circuit Court's decision and becomes final
 within 15 days if no further motions are filed.
     Although the Price Stabilization Program has not been in effect since that
 winter, Laclede Gas has continued to take an aggressive approach to moderate
 the impact of price fluctuations on its customers. The utility strives for
 increased price stability through its gas supply risk management program in
 which it utilizes a variety of financial instruments to protect, or "hedge,"
 approximately 70% of its normal annual natural gas purchases. Laclede Gas also
 hedges physically -- through the use of its extensive gas storage facilities
 -- which allows the utility to purchase gas during the summer, when prices
 have historically been more favorable, and to store it for future use.
     Laclede Gas Company, a regulated subsidiary of The Laclede Group, Inc.
 (NYSE:   LG), is the largest natural gas distribution utility in Missouri,
 serving more than 630,000 natural gas customers in the St. Louis area and
 elsewhere in eastern Missouri.

SOURCE Laclede Gas Company