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News

March 29, 2021

Midwest Energy Announces Natural Gas Cost Recovery Plan

[Updated May 10, 2021 to include meeting links]

Midwest Energy is holding two online meetings to discuss treatment of excess energy costs from February’s Winter Storm Uri, and proposed adjustments to gas delivery rates. 

A virtual “Town Hall” meeting was held on April 8 to inform customers and answer questions about both issues.  Approval of a cost-spreading plan and adjustments to rates will be discussed at an open May 17 meeting of the Board of Directors. 

Winter Storm Uri Impacts

Because of Midwest Energy’s owned generation operating during the energy emergency, electric impacts are expected to be minimal.  Natural gas is a different matter.  While some of the final costs are not yet known, Midwest Energy spent approximately $12 million buying gas in February 2021; normal pricing for the month would have been roughly $1.5 million. 

Midwest Energy will ease customer impact by amortizing the excess costs.  The Board is considering spreading cost recovery over an estimated 24 months, making average residential impact roughly $8.27 month.  Subject to Board approval, residential and commercial customers would pay up to an estimated 14.3¢ per therm addition to the Gas Supply Cost Adjustment.  This will appear on bills as part of the “Cost of Gas Commodity per Therm” charge, effective no sooner than July 1, 2021.  Irrigation customers, which were not operating during the Winter Storm Uri period, are not included in the excess cost recovery proposal to be considered by the Board.

At a special Board meeting Mar. 3 to address Winter Storm Uri issues, the Board of Directors froze new customer requests to transfer accounts to gas transport service, effective with any applications received after Mar. 1, 2021.  That decision will be reconsidered at the May meeting.

Natural Gas Rate Case

At the May 17 meeting, the Board will also consider adjustments to natural gas delivery rates in a matter originally scheduled for consideration in May 2020.  That decision was suspended due to the pandemic. 

The proposed delivery rate change would result in a net revenue increase of $1.04 million to the company compared to current rates.  The increase would support pipeline safety, reliability improvements and operating expenses.  If adopted as proposed, the delivery rate changes would result in an average residential bill increasing by approximately 98¢ per month compared to currently effective rates based on actual 2020 gas usage.  Proposed changes include increasing the monthly customer charge for residential customers from $18 to $19 and the delivery rate from 13.5¢ per therm to 16¢ per therm.

Even with the proposed changes, Midwest Energy’s residential gas delivery rates would remain among the lowest with commercial rates remaining the lowest in Kansas.  If approved, rates would go into effect no sooner than July 1, 2021.  Proposed bill examples and other rate information can be found at: www.mwenergy.com/residential/gas_rate_changes_2021.   

Accessing the Meetings

Due to the ongoing COVID-19 pandemic, the April 8 “Town Hall” will be accessible only via streaming video on YouTube, while the May 17 open meeting will be accessible via WebEx.  All Midwest Energy customers are welcome to attend both meetings.

The virtual “Town Hall” meeting to discuss Uri’s impacts and the natural gas rate case was held April 8; a recording of that meeting is available here. 

The open meeting at which the Board will consider all proposed changes will occur May 17 at 1 p.m.   You can access the open meeting at https://bit.ly/3v57Pav.  Alternately, you may dial into the meeting by phone by calling 1-415-655-0001; when prompted for the meeting number, enter 133 134 5565.  Members may submit questions before or during the meeting via e-mail to questions@mwenergy.com

Customers may send comments regarding the proposed rate changes to Midwest Energy no later than May 7, 2021.  Comments should be addressed to Bob Muirhead, VP for Customer Service, at bmuirhead@mwenergy.com, or by calling 785-650-2502 with your comments.

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