ST. LOUIS, Nov. 25, 2019 /PRNewswire/ -- Today, Spire
released new data regarding progress on pipeline upgrades across
Missouri. Over the last 15 years,
Spire has spent more than $1 billion
to replace more than 2,500 miles of aging pipeline across the
state. And while that sounds like a big price tag, Spire has been
able to do this while keeping customer bills lower than they were
15 years ago.
![Spire color logo Spire color logo](https://mma.prnewswire.com/media/347388/Spire_Orange_Logo.jpg)
"Thanks to an abundant, domestic supply of natural gas, the
price for natural gas has never been more affordable. While the
price for the commodity is low, we've been doubling down on
replacing infrastructure to make sure that our customers have a
modern system to deliver natural gas to their homes and businesses
safely, efficiently and with reduced emissions. And we've done it
in a way that balances the total cost for customers. Today,
Missouri customer bills are nearly
20 percent less than they were 15 years ago—that's an average
annual savings of $175 for each
Missouri household. We're proud of
being able to do this for our customers and communities," said
Scott Carter, president of Spire
Missouri.
Pipeline replacement accelerated thanks to Missouri ISRS
legislation
Pipeline replacement has been accelerated in the last 15 years
thanks to Missouri Infrastructure System Replacement Surcharge
(ISRS) legislation enacted in 2003 that allows for incremental
replacement costs to be recovered by utilities more quickly. The
legislation serves to 1) address an emerging safety issue related
to aging cast iron and bare steel pipes, 2) enhance Missouri Public
Service Commission (MoPSC) oversight and transparency into
replacement efforts, 3) reduce the regulatory cost of more frequent
rate cases and 4) ensure that utility companies are able to attract
the investor capital efficiently to fund these multi-million dollar
efforts.
Carter explained, "The Missouri PSC has a longstanding
program—which we wholeheartedly support—that accelerates
replacement of cast iron and bare steel pipes. The ISRS statute was
intended to promote safety-related investments and it's been
working effectively for more than a decade here in Missouri. And, while we've been able to
upgrade aging pipes—some of which had been in ground since the
1800s—we're also making a significant positive environmental impact
by reducing emissions from leaks in the system. It's a win-win-win,
for our customers, communities and the environment."
Missouri Court issued
rulings that challenge MoPSC authority on ISRS
On Nov. 19, 2019, the Missouri
Western District Court of Appeals issued rulings that determined
that certain Spire expenditures approved by the MoPSC in 2016, 2017
and 2018 were not eligible for ISRS recovery, and called for refund
of amounts totaling up to $12
million, or about $10 for the
average Missouri homeowner.
"The Court's decision regarding the 2018 ISRS funding is
especially troubling. The Court ruled on something that wasn't in
question by the Missouri PSC, the U.S. Department of
Transportation, the National Association of Regulatory Utility
Commissioners or any US state that has, or has had, cast iron and
bare steel pipelines. The Missouri Western District Court appears
to have second-guessed the expertise of the Missouri PSC," said
Carter.
Carter continued, "The court does not say that we shouldn't be
making these upgrades. They are saying that to fund it through the
ISRS mechanism—instead of through recovery of investment in a rate
case which can take years—we must prove something more to verify
that the pipes are 'worn out or deteriorated.' But, experts know
that cast iron was put in the ground from the 1800s to the 1950s
and that bare steel was used in the 1940s and 1950s before
innovation and technology allowed for safer, smarter and more
efficient options."
Craig Hoeferlin, Spire's vice
president of operations services, including engineering and safety,
explained, "Modernizing infrastructure dovetails with the
deterioration of existing pipes, but it's much more than that. We
have a detailed and voluminous Distribution Integrity Management
Plan [DIMP]—that is the cornerstone of industry practice and widely
accepted by Missouri and fellow
regulatory jurisdictions—to properly and safely guide pipeline
replacement. It takes into account a pipeline's history, geography,
and overall risk profile. In addition, we examine the ability for
pipes to work safely with today's higher pressure delivery
systems." Craig continued, "This ruling—if upheld—could take the
ISRS statute from a mechanism intended to expedite cost-effective,
safety-related investments into one that significantly hinders such
investments. That's not good for our customers or communities."
Procedural next steps in response to the Missouri Court's ruling
Spire will file appeals, so the Court's orders will not become
effective until the appeal process is exhausted. Should the Court's
decision ultimately stand, the Court will remand these matters to
the MoPSC who will define its process to respond to the decision
and determine the appropriate refund, if any, at a later date.
Carter added, "Our customers and communities deserve the very
best from us. We are responsible for providing energy safely so
that families can cook Thanksgiving dinner and stay warm when it's
cold outside, without worrying about the safety, efficiency and
sustainability of the complex and intricate infrastructure that
delivers natural gas to them. We made a promise to our customers
that we'd take good care of them, and we intend to keep that
promise. On behalf of our employees, customers and communities, we
strongly disagree with the court rulings and plan to vigorously
defend the timely and efficient modernization of
infrastructure."
About Spire
At Spire Inc. (NYSE: SR) we believe energy exists to help make
people's lives better. It's a simple idea, but one that's at the
heart of our company. Every day we serve 1.7 million homes and
businesses making us the fifth largest publicly traded natural gas
company in the country. We help families and business owners fuel
their daily lives through our gas utilities serving Alabama, Mississippi and Missouri. Our natural gas-related businesses
include Spire Marketing, Spire STL Pipeline and Spire Storage. We
are committed to transforming our business through growing
organically, investing in infrastructure, and advancing through
innovation. Learn more at SpireEnergy.com.
Investor Contact:
Scott W. Dudley Jr.
314-342-0878
Scott.Dudley@SpireEnergy.com
Media Contact:
Jessica B. Willingham
314-342-3300
Jessica.Willingham@SpireEnergy.com
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SOURCE Spire Inc.