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Spire lays to bed old claims of increased rates with proven savings in latest rate case

JEFFERSON CITY, Mo. – The Missouri Public Service Commission has been buried deep into documents and papers regarding the natural gas rate case for Spire Missouri, but the company is looking to dispel some of the rumors that preceded the rate case in recent years.

Filings in the current Spire case indicate that PSC staff has backed away from previous allegations concerning the company’s acquisitions of other utilities, acquisitions that transformed the company into one of the largest gas utilities in the country.

Spire has changed significantly in the past years, completing a number of acquisitions and transforming themselves into one of the largest gas utilities in the country. In 2016, staff alleged that the acquisitions had led to higher rates for Missouri customers, but now, both Spire and the PSC staff seem to agree that the acquisitions have actually led to savings.

Steve Lindsey

“Several years ago we made the decision to remake this company with the aim of providing better, more cost-effective service to our customers,” said Spire Chief Operating Officer Steve Lindsey. “The results of those efforts have been nothing short of transformational. It’s a testament to the 3,300 dedicated Spire employees that we’ve been able to deliver, and even exceed these ambitious goals.” 

Back in September of 2016, the Missouri Public Service Commission’ staff released an investigative report, which Spire (formerly known as the Laclede Group) maintains falsely concluded that rates had risen while services decreased for Missouri customers after the company purchased a large natural gas utility company in Alabama.

The 77-page report read:

“Staff is of the opinion that the Alagasco acquisition has had effects on Missouri ratepayers, including higher rates due to the effects of increased holding company debt on Laclede Gas’ credit rating; direct allocation of acquisition and transition costs; decreased customer service quality, including billing errors and the ongoing loss of experienced customer service representatives in the call centers.

“Staff is of the opinion that the EnergySouth acquisition will have effects on Missouri ratepayers similar to those that the Alagasco acquisition has had.”

At the time, the PSC staff said Spire should have sought approval from the Missouri regulatory commission in their $1.6 billion purchase of Alagasco. Spire argued differently, saying that the PSC has no jurisdiction outside of the state. According to the report, Laclede (Spire) has committed resources as part of the deal.

“Laclede Group had no approval from the (PSC) to commit (Laclede Gas) to operate Alagasco or make commitments on its behalf to the Alabama Public Service Commission,” the PSC report read. “The Alabama Public Service Commission nonetheless approved the transaction in part based on these nonauthorized (Laclede Gas) commitments.”

The news was reported in several media outlets:

Fast forward to 2018, and the PSC’s work in the current rate case seems to indicate differently.

“As a result of the acquisitions of Missouri Gas Energy and Alagasco collectively, we will provide savings to our customers in the rough amount of $69 million,” Lindsey continued.

Lindsey outlined the savings data the company provided to the PSC for the ongoing rate case, breaking it down to show about $50 million in savings through the acquisitions and integration of Missouri Gas Energy and Laclede Gas, as well as another $19 million from Alagasco and Energy South.

The company argues that these savings would not be possible without Spire’s decision to grow. They say that the staff has not contested the financial analysis provided by the company, and say that, instead, staff was forced to admit that rates had not changed since the acquisitions.

In fact, Spire says their base natural gas rates have not increased in eight years except for safety-related and mandated public improvements under ISRS. Spire says that, thanks to the savings gained from the acquisitions have helped to offset infrastructure investments as well as inflation costs. That, in turn, has led to better service for their Missouri customers.

Now, the staff is looking to lower the rates, an about-face from the position stated back in 2016.

“If these rates are fully adopted, a customer’s overall bill will be lower than they were a decade ago,” Lindsey said.

Lindsey says the company is continuing to work to invest in their system to improve safety, reliability, and service. He says that their investments are more than just upgrades to their assets; they’re investments in the community, and they want to be in a position to do right by their neighbors.

The Missouri Times reached out to the PSC for comment, but as the case is still pending, the commission does not have a comment at this time.

You can read Spire’s full filing below:

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