Ameren hikes gas prices 39 percent By JEFFREY LOGSDON, Missourian staff

November 1, 2000 Natural gas customers expect their bills to raise during the winter. But this year, customers are facing a double whammy. Two gas rate increases that go into effect today will raise the bills of AmerenUEBs 107,000 Missouri customers.

In AmerenUEBs central Missouri district, the average residential winter gas bill is expected to be $112.43 a month, up 39 percent from last yearBs average of $80.88, according to AmerenUE.

The majority of the additional $31.55 has nothing to do with the $4.2 million dollar annual increase the Public Service Commission granted AmerenUE last month.

BThat increase was for commodity and delivery charges,B said Doug Micheel, a lawyer for the commission.

The real culprit of the increase is the price of wholesale gas, which has more than doubled in the past year.

AmerenUE spokesman Mike Cleary said the wholesale cost of gas, called the purchased gas adjustment, accounts for more than half of an average customerBs bill. The increase in wholesale gas prices will account for almost 90 percent of the total winter increase.

AmerenUE reported that wholesale prices of natural gas are unusually high because of high crude oil prices, low natural gas reserves, increased demand for natural gas due to the booming economy and low prices in the 1990Bs that dampened gas exploration and production.

Gas rates are not regulated by the government but rise and fall with the market of supply and demand.

They operate in a similar fashion as crude oil. Like oil, deposits occur naturally within the earth. Wholesale companies find and excavate natural gas deposits and sell it to distributors like AmerenUE.

If supply is low and demand is high B like the situation this winter B prices go through the roof.

http://digmo.org/news/local/premium/1101local3572.html

-- Martin Thompson (mthom1927@aol.com), November 01, 2000