Gas Rate Changes Adopted; Residential Rates Still Lowest in Kansas

During a virtual open meeting of the Board of Directors on May 17, Midwest Energy’s Board of Directors approved several tariff changes.

Approved was a plan to recover excess gas costs from February 2021’s Winter Storm Uri; adjustments to gas delivery rates; tariff changes that merge the M, K and T gas systems into a single system; and changes to reconnection fees for electric and natural gas customers. All changes will go into effect July 1, 2021.

Winter Storm Uri Impacts

During Winter Storm Uri, Midwest Energy incurred roughly $12.2 million in natural gas charges. Nearly $9.7 million remains to be recovered. The Board approved a plan under which residential and commercial retail customers would pay a 14.3¢ per therm addition to the Gas Supply Cost Adjustment over a period of roughly 24 months. Average residential impact would be about $8.27 per month, or $200 total. The charge will appear on bills as part of the “Cost of Gas Commodity per Therm” charge. Agricultural customers (irrigation and grain dryers), which were not operating during the Winter Storm Uri period, and gas transport customers, are not included in the excess cost recovery plan approved by the Board.

Before approving the plan, the Board considered comments from 10 customers, many of which focused on a desire to pay off the excess charges in one month. Midwest Energy is not adding interest expense during the recovery period.

Natural Gas Rate Case

The Board approved adjustments to natural gas delivery rates in a matter originally scheduled for consideration in May 2020 (but suspended due to the pandemic), which will result in a net revenue increase of $1.04 million to the company compared to current rates. The increase will support pipeline safety, reliability improvements and operating expenses.

The new delivery rates would result in an average residential bill increasing by approximately 98¢ per month compared to currently effective rates based on 2020 gas usage.

The changes increase the monthly residential customer charge from $18 to $19 and the delivery rate from 13.5¢ per therm to 16¢ per therm, while eliminating the $1.42 monthly Gas Infrastructure Rider. Even with the approved changes, Midwest Energy’s residential and commercial gas delivery rates remain the lowest in Kansas.

Additionally, the Board approved several changes to natural gas tariffs, including the merging of the M, K and T gas systems into a single system.

Electric and Gas Meter Reconnection Fees

The Board approved a change in reconnection fees for electric and natural gas customers. Currently, the fee for reconnection for the first meter is $15, and $5 for additional meters on the same location. The Board approved changing the fee to a flat $15 per meter.

Charts of bill impacts, and a summary of tariff changes, is at www.mwenergy.com/residential/gas_rate_changes_2021.