The PGA reflects the wholesale cost of natural gas from the company's suppliers, the cost of transporting that gas to the AmerenUE system, and an adjustment to compensate for any under-collection or over-collection of actual costs in previous periods. For residential customers, the PGA accounts for about two-thirds of an average bill, excluding taxes.
Under the new adjustment:
? A typical AmerenUE residential gas customer in central Missouri would pay an average of about $13.30 per month less than last winter\-a decrease of 9.5 percent\-during the main winter heating season of November through March.
? Residential customers in Rolla, Salem and Owensville would pay an average of 64 cents per month less than last winter\-a decrease of one-half of one percent.
? Residential customers in the southeast Missouri counties of Cape Girardeau, Scott and most of Stoddard would pay an average of $23.60 per month less than last winter\-a decrease of 16.2 percent.
? Residential customers in the southeast Missouri counties of Butler and Bollinger, and the Stoddard County community of Advance, would pay an average of $6.50 more than last winter\-an increase of 5.8 percent.
The impact varies, because supplier costs, transportation and storage costs, and average customer usage differ among these different geographical areas\- which are not interconnected. Adjustments to reflect any under-collection or over-collection of actual costs incurred by AmerenUE in previous periods also causes these amounts to vary among the different regions.
AmerenUE's new PGA charges would also apply to commercial and industrial customers, but their usages vary much more widely than for residential customers, making it impractical to give averages.
AmerenUE officials explain that the main reason the PGA in Rolla, Salem and Owensville would not decline as much as in the rest of central Missouri is an increase in the transportation charges from Missouri Gas Company, one of the intrastate pipelines that transport gas to the area. They say the main reasons for a higher PGA in Butler and Bollinger Counties, and the Stoddard County community of Advance, are increases in the cost of gas supplied to that area compared to last winter's below market gas costs, the under- recovery of AmerenUE's actual supply costs during the 12-month period ending in August 2006, and a declining number of gas customers in that area.
Although most of the natural gas supply that was disrupted by last year's Gulf hurricanes has been restored, the balance between supply and demand in the U.S. natural gas industry is still in a precarious state," warns Scott Glaeser, vice president, Gas Supply and System Control, AmerenEnergy Fuels and Services.
"Although market prices for natural gas have eased recently compared to last winter, there is still the potential for price spikes driven by extreme weather conditions, volatility in crude oil prices, and production disruptions," Glaeser says. "Until significant new gas production comes online from new resources such as the restricted areas of the Outer Continental Shelf or North Slope gas from Alaska, the precarious balance between supply and demand will continue to cause price volatility and spikes in gas prices," Glaeser adds.
AmerenEnergy Fuels and Services purchases natural gas for the Ameren companies from gas producers located in various U.S. production areas. The wholesale price is not regulated, and rises or falls based on market conditions caused by supply and demand. As stated earlier, AmerenUE passes the cost of natural gas on to customers, dollar for dollar, through the PGA, without "markup."
Glaeser says Ameren takes significant steps to minimize the impact of wholesale price volatility in the natural gas market, including:
? Using financial "hedging" instruments and negotiating both long and short term natural gas supply contracts to mitigate price volatility.
? Purchasing natural gas during the summer season when prices are typically lower and storing the gas in underground storage fields, which then provide almost half of the natural gas required during the winter heating season.
? Diversifying interstate pipeline suppliers and accessing multiple production areas to minimize the impact of supply disruptions from any particular area such as the Gulf of Mexico.
Customers can ease the impact of typically higher winter bills by signing up for AmerenUE's Budget Billing program, which "averages out" their monthly payments throughout the year.
AmerenUE also recommends that customers have their furnaces checked by a professional heating and cooling contractor at the start of the heating season to make sure the units are operating efficiently and safely. In addition, weatherization features such as caulking and weather stripping should also be checked, and repaired or replaced if necessary.
For residential customers who want to upgrade their natural gas equipment, AmerenUE's Missouri Energy Efficient Natural Gas Equipment Rebate Program offers rebates for a portion of the cost of new Energy Star(R) qualified natural gas furnaces and programmable thermostats. Rebates are also available for commercial natural gas furnaces and certain other Energy Star(R) qualified commercial natural gas utilization equipment. But rebates under this pilot program are subject to remaining funds, so customers who wish to take advantage of this program are urged to apply early.
Information about the rebate program, Budget Billing, sources of energy assistance and energy-saving tips are available by visiting "Natural Gas Center" on the Ameren Web site: www.ameren.com, or by calling AmerenUE at 1-800- 552-7583.
AmerenUE is a subsidiary of St. Louis-based Ameren Corporation. The Ameren companies serve 2.4 million electric customers and nearly one million natural gas customers in a 64,000-square-mile area of Missouri and Illinois.
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