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 Statement Reverend Earl E. Nance, Jr.
Laclede Gas' Catch-Up/Keep-Up Will Raise Rates

Missouri Public Service Commission Formal Hearing
November 18, 2002, 12 Noon
Room 116, Wainwright State Office Building

Laclede Gas' Catch-Up/Keep-Up Program Will Raise Rates for All Ratepayers

It certainly is a privilege to be back here before the Missouri Public Service Commission. Our last appearance, as a regional energy assistance and advocacy charity, was to oppose the $36.1 million non-gas rate hike for Laclede Gas.  The increase would have produced significant hardships for the working poor, the elderly and needy families with small children.

We appreciate the dedication by the PSC staff and the Commission in further negotiating with Laclede Gas, which ended with about a $14 million increase. Although still a burden, ratepayers in the Eastern part of Missouri did get some relief.

Today, we are here to pick-up where our chairman, J. Kim Tucci spoke at the previous hearing. We have heard that there have been some slight changes in an effort to help the gas ratepayers digest the Laclede Gas "Catch-Up/Keep Up" program.  Even with the removal of the proposed 10%  from Laclede Gas' profit the revised program still is hard to swallow. The revised proposal appears to be shrouded in a sincere attempt to help eligible, low-income customers, through financial assistance.

Unfortunately, the Laclede Gas "Catch-Up/Keep Up" program may hurt the same people it claims it wishes to help.  Laclede Gas proposes to fund this program in part with pipeline discounts it receives.  Those discounts are currently being enjoyed by all of Laclede's ratepayers. The current proposal is an unfortunate situation which has pitted us against them.  Us being many hard-working class folk, including those, who are swimming up stream in an effort to make payment on their car,  rent, or mortgage bills during a very challenging time in our economy.

Them: low-income customers, who are still making choices between just the basics in life -- heating or eating; or heating or high prescription drug bills.  These individuals, along with us, are already facing a potential increase of upwards to 17-20%  in our natural gas bills this winter.  If you add the $10.00 annual rate increase with the Catch-Up/Keep-Up Program, which is  the estimated savings of the pipeline discount fees, there will be a significant increase to our over all gas bills this coming winter.  And if the PSC approves Laclede's Catch-up/Keep-Up program proposal, at the same time, its  refusal to invoke the Emergency Amendment  the Cold Weather Rule, will not provide enough financial relief to many of us who do not qualify for the Catch-Up/Keep-Up Program.

Most of these needy customers just cannot afford high natural gas costs each month, period.  Laclede's program does not wipe away the financial burden of their needy customers, and it should. Compassion over profits must be one alternative. And if Laclede is truly compassionate about the needy neighbors, they need to use some of those profits to wipe totally clean millions of dollars in arrearages.  It is clear to Heat-Up St. Louis, that many of those needy families will not be able to catch up. The program punishes those needy neighbors by canceling them from the program when they cannot afford to stay caught-up.

Laclede Gas says that under extenuating circumstances, it will reinstate needy families who fall behind.  However, their proposal does not spell out what the extenuating circumstances are, and to ensure that a program protects the needy, the PSC has a responsibility to enforce the fine print. 

What happens the rest of us, when we are asked to give monthly to the Laclede Gas Dollar-Help program which is on a volunteer basis? This program and others like it are a great volunteer effort to help our needy neighbors.  Laclede does a modest matching funds program with Dollar-Help. So, why not put some significant bucks into its Catch-Up/Keep-Up program?

Laclede wishes to take away our 30% pipeline discount savings, causing havoc for many lower and middle income households, whose income levels do not qualify them for a Catch-up/Keep up program. In the end Laclede will profit from the program, no one else, as the program only deals with its gas customers. The Missouri Public Service Commission can ill-afford to have an image of supporting corporate welfare, and that's what the Catch-Up/Keep-Up program appears to be.

Using our pipeline savings is a very dangerous alternative. When you take 30% out of the equation, it will force an increase of 30% for all customers, including the needy families who Laclede Gas is truly attempting to help. Someone has to make-up that difference. There is no mechanism which protects these needy families who enlist in this program from the 30% which will rebound back as an increase on their monthly gas bills.  Many needy households will barely be able to pay their arrearages.

The bottomline is that Laclede needs to wipe clean 100% of the arrearages of its low-income customers by using its profits, or create a yearly special discount rate for seniors, the disabled and needy families who find natural gas not affordable.  These are two great compassionate programs, and they will not cause the unfair appearance of robbing Peter to pay Paul.

Thank you for the opportunity for us to come before you.  And at this time, I would prefer that all questions, if there are any, will be deferred to our president, Gentry W. Trotter, as he is to be sworn in next.

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