Laclede Gas Seeks Approval of Weather Mitigation Plan

Apr 20, 2001, 01:00 ET from Laclede Gas Company

    ST. LOUIS, April 20 /PRNewswire Interactive News Release/ -- Laclede Gas
 Company (NYSE:   LG) is seeking regulatory approval of a plan that would protect
 Laclede's 633,000 natural gas customers from weather-related fluctuations in
 their bills and stabilize the Company's annual revenues.
     The plan Laclede filed today with the Missouri Public Service Commission
 would mitigate the volatile effects of weather by basing a portion of
 customers' winter bills on usage associated with normal weather and adjusting
 to offset the impact of temperatures that are colder or warmer than normal.
 Laclede's current gas distribution rates are tied directly to weather, and
 Laclede's revenues increase or decrease depending on colder- or
 warmer-than-normal weather.
     "We are looking for ways to reduce the volatility in customers' bills,
 which hit home in very clear terms during this past winter," said Richard
 Hargraves, Laclede's Director of Corporate Communications.  "We were faced
 with a combination of unseasonably cold winter weather and sharply higher
 wholesale gas costs.  So customers were using much more natural gas to heat
 their homes, while higher wholesale gas prices were being passed through to
 customers."
     Weather clauses are working successfully elsewhere in the country,
 Hargraves said.  Approximately 40 natural gas utilities in more than 20 states
 or Canadian provinces have weather clauses, according to a recent survey
 conducted by the American Gas Association.
     "Some companies have had weather clauses since 1980, although the average
 time companies have been operating under weather clauses is more than eight
 years," Hargraves said.
     The weather adjustment would apply to Laclede's distribution costs, that
 portion of a customer's bill that covers Laclede's costs of operating and
 maintaining its 15,000-mile distribution system and storage facilities.  It
 would apply to residential, commercial and industrial customers.  But it would
 not affect wholesale gas costs -- the costs of acquiring enough gas to meet
 customer needs and transporting it from production fields to Laclede's service
 area.  These costs would remain covered by Laclede's Purchased Gas Adjustment,
 which passes through to customers increases and decreases in these wholesale
 gas costs.
     Laclede already has received PSC approval of its hedging plan for the
 coming winter, and the Company has proposed other measures designed to reduce
 the volatile impact on customers' bills of wholesale price changes.
     By stabilizing Laclede's revenues, the weather clause would allow Laclede
 to cover what are primarily fixed costs that do not fluctuate with the weather
 while still providing the Company's shareholders with a fair return on
 investment.
     Laclede Gas is the largest natural gas distribution company in Missouri,
 serving 633,000 customers in St. Louis and surrounding counties in eastern
 Missouri.
 
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SOURCE Laclede Gas Company
    ST. LOUIS, April 20 /PRNewswire Interactive News Release/ -- Laclede Gas
 Company (NYSE:   LG) is seeking regulatory approval of a plan that would protect
 Laclede's 633,000 natural gas customers from weather-related fluctuations in
 their bills and stabilize the Company's annual revenues.
     The plan Laclede filed today with the Missouri Public Service Commission
 would mitigate the volatile effects of weather by basing a portion of
 customers' winter bills on usage associated with normal weather and adjusting
 to offset the impact of temperatures that are colder or warmer than normal.
 Laclede's current gas distribution rates are tied directly to weather, and
 Laclede's revenues increase or decrease depending on colder- or
 warmer-than-normal weather.
     "We are looking for ways to reduce the volatility in customers' bills,
 which hit home in very clear terms during this past winter," said Richard
 Hargraves, Laclede's Director of Corporate Communications.  "We were faced
 with a combination of unseasonably cold winter weather and sharply higher
 wholesale gas costs.  So customers were using much more natural gas to heat
 their homes, while higher wholesale gas prices were being passed through to
 customers."
     Weather clauses are working successfully elsewhere in the country,
 Hargraves said.  Approximately 40 natural gas utilities in more than 20 states
 or Canadian provinces have weather clauses, according to a recent survey
 conducted by the American Gas Association.
     "Some companies have had weather clauses since 1980, although the average
 time companies have been operating under weather clauses is more than eight
 years," Hargraves said.
     The weather adjustment would apply to Laclede's distribution costs, that
 portion of a customer's bill that covers Laclede's costs of operating and
 maintaining its 15,000-mile distribution system and storage facilities.  It
 would apply to residential, commercial and industrial customers.  But it would
 not affect wholesale gas costs -- the costs of acquiring enough gas to meet
 customer needs and transporting it from production fields to Laclede's service
 area.  These costs would remain covered by Laclede's Purchased Gas Adjustment,
 which passes through to customers increases and decreases in these wholesale
 gas costs.
     Laclede already has received PSC approval of its hedging plan for the
 coming winter, and the Company has proposed other measures designed to reduce
 the volatile impact on customers' bills of wholesale price changes.
     By stabilizing Laclede's revenues, the weather clause would allow Laclede
 to cover what are primarily fixed costs that do not fluctuate with the weather
 while still providing the Company's shareholders with a fair return on
 investment.
     Laclede Gas is the largest natural gas distribution company in Missouri,
 serving 633,000 customers in St. Louis and surrounding counties in eastern
 Missouri.
 
                     MAKE YOUR OPINION COUNT -  Click Here
                http://tbutton.prnewswire.com/prn/11690X57254252
 
 SOURCE  Laclede Gas Company