Ameren Missouri residential customers would pay the lowest Purchased Gas Adjustment (PGA) rates in 16 years under a proposed rate decrease filed with the Missouri Public Service Commission.
The market-driven proposal calls for a PGA rate of nearly 47 cents per 100 cubic feet (Ccf) of natural gas, down by 5.6 percent from the current rate of 50 cents/Ccf. If approved by the PSC, the new PGA rate would take effect April 1.
Compared to the rates enacted in October, the proposed PGA would save an average residential customer in certain areas - including Columbia, Jefferson City, Mexico and Moberly - approximately $1.40 per month. An average residential customer in the Rolla system, which includes Rolla and Owensville, would save approximately $1.25 per month.
Ameren officials said PGA rates have been dropping for the last few years to reflect wholesale natural gas price decreases caused by growing supplies generated by shale production.
The PGA reflects the wholesale cost of natural gas, the cost of transporting gas to the company's system plus an adjustment to compensate for varying actual costs in previous periods. Wholesale gas prices aren't regulated, and price changes are the result of market conditions of supply and demand. Wholesale costs consequently change daily, while the PGA rate is held stable over a period of months.
Ameren officials also said they monitor the PGA balance throughout the year to assess the need to adjust gas rates. The company passes the PGA costs on to customers on a dollar-for-dollar basis without any markup or profit, and they are allowed to make up to four changes to the PGA per year. No more than one change may be made during any two consecutive months.