Despite Fulton's participation in a rate increase intervention, city residents will see higher gas bills in April.
Fulton is increasing what it charges customers from 75 cents per unit of natural gas to 87.5 cents per unit. Fulton's supplier, Panhandle Eastern Pipeline Company, is upping the rate it charges to deliver gas, and the city can't absorb the difference, Fulton Director of Administration Bill Johnson said.
"We are fighting the proposed rate increase," Johnson said during Tuesday night's City Council meeting. "If we're successful, there might be some relief, but we can't promise it will come back down."
Fulton relies on the Panhandle Eastern Pipeline Company for its supply of natural gas. The city purchases the gas from a supplier, but the pipe gets it all the way from Kansas at a connection point near Hatton.
In late 2019, the company announced it would be increasing its rates from about 35 cents per decatherm of natural gas to $1.56 per unit in March of this year. Fulton joined about 20 other small towns in disputing the rate increase to the Federal Energy Regulation Commission in an effort coordinated by Illinois-based Interstate Municipal Gas Agency.
Earlier this month, Johnson said the rate hike would be delayed due to the intervention. Now, it appears Fulton will be facing the higher rate in March.
"In Missouri, for an electric rate increase to take effect, (it) has to be approved by the state Public Service Commission," Johnson explained Wednesday. "I was under impression that for a natural gas rate change to take effect at, basically, the federal level, it would have to be approved by FERC. That is not the case. We've never dealt with FERC on a rate case such as this."
Those costs will trickle down to customers on their April bills.
"In December, Fulton used 104,000 decatherms," Johnson said. "At the current rate, we paid $41,000 to move that gas from Kansas to Fulton. At the proposed rate, we would've been billed $186,000."
The difference, he said, would've amounted to around $860,000 in extra costs to Fulton per year — taking into account lower natural gas consumption over the summer.
Ward 2's Jeff Stone said as a consumer of natural gas, he's sympathetic to fellow Fulton residents who are dreading an increased utility bill.
"But at the same time, as a councilperson, I understand the city utility board can't absorb that cost," Stone said.
An average residential customer who uses 200-250 units of natural gas per month over the winter will see about $25-$30 added to their monthly bill. However, as Johnson pointed out, it should be a little warmer by April, meaning less natural gas consumption.
"It kills me to see the rate go up like it is," Ward 3's John Braun said.
Nevertheless, council members voted unanimously to increase the rate.
Fulton and IMGA's intervention case with FERC is ongoing. Mayor Lowe Cannell said the city can't divulge details about the case's current status at this time.
In early January, Johnson said IMGA had made a counter-offer to FERC, and Panhandle came back with a significantly higher one; he expected the case to be settled in court.
"Maybe we can get this whole thing resolved before the next heating season," Johnson said Tuesday.