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PSC Ouster Effort

January 23, 2001
By: Michael Patrick Carney and Jennifer Ginsberg
State Capital Bureau

JEFFERSON CITY - Both Missouri's governor and legislators called for investigations into natural gas pricing after the state's utility-regulating commission approved a 44% price hike for the gas company that serves western Missouri.

Within hours after approval by Public Service Commission, Gov. Bob Holden asked the state attorney general to launch an investigation of natural gas pricing.

Harsher language came from the Senate's Democratic Floor leader who said he would file a resolution to oust the three PSC members who approved the price increase.

"It's unimaginable that they would do this," said Sen. Ronnie DePasco, D-Kansas City.

"I would like to remove them," DePasco said of the majority of the PSC, all of whom were appointed by former Missouri Gov. Mel Carnahan. "They're not doing their job. Let's get some new ones in there."

Meanwhile, the governor asked Attorney General Jay Nixon to investigate "soaring natural gas prices," emphasizing the hardship for low- and middle-income families hard hit by such a dramatic rate increase.

"Many questions exist about why these prices have risen so sharply, and whether efforts have been made to ensure Missourians are being charged an appropriate price for the product," Holden said in a letter to Nixon.

Jerry Nachtigal, the Governor's director of communications, said Nixon's investigation should begin immediately and will hopefully progress in a timely manner while producing tangible results.

"I'm sure the Attorney General's investigation will ask those in the industry; suppliers, wholesalers, for their explanations for why we're seeing these high natural gas prices," Nachtigal said.

Nixon, however, did not immediately accept the call for an investigation.

He issued a statement saying his office will review facts associated with the recent pay hikes, rather then to lead an investigation.

He plans on focusing on the wholesale market because the retail price is regulated by the Public Service Commission.

Later in the evening, Holden expressed his support for the review that Nixon's office will soon undertake.

"I would hope we would all look at these issues to protect the consumers of Missouri," Holden said.

Faced with the national explosion of natural gas prices of recent months, the PSC voted 3-2 to approve a rate increase for customers of Missouri Gas Energy, which serves residents across a broad swath of Western Missouri. Also pending before the commission is a 38-percent rate increase for customers of Laclede Natural Gas, which serves the St. Louis area.

"I respect the three branches and the authority and the power that each has and it his prerogative to do this," said Chairman Sheila Lumpe, a former House member appointed to the PSC in 1997. "We are supposed to provide reliability of service at reasonable rates to the consumer, allowing the company to recoup their costs. If this is the price they have to pay at the well head, then that is their cost."

Natural gas rates have exploded this winter, with extremely cold weather pushing national wholesale prices up as much as 300 percent over a year ago, according to a recent PSC report.

DePasco and Rep. Dennis Bonner, D-Independence, pledged to introduce a resolution later this week that would oust the three commissioners who OK'd the increase.

DePasco acknowledged that local gas providers were subject to increased costs, but argued that the price had been artificially inflated somewhere along the line.

"Someone, someplace is forcing a price increase on natural gas when we have enough natural gas in the United States to last many more years," DePasco said.

The resolution would require the assent of two-thirds in both legislative chambers, an obstacle that DePasco said he was not likely to overcome.