FINNEGAN, CONRAD & PETERSON L.C.

Gas Utilities Seek to Include Bad Debts In Their PGA Clauses

All the natural gas distribution companies in Missouri and Kansas have filed as a group to recover last winter's increased bad debts through their purchased gas adjustment clauses. These billings relate to gas that was delivered to customers, but for which the customers did not, would not, or could not pay.

Bad debt is typically considered a cost of doing business, treated as an expense, and recovered as a part of the utility's cost of service. These bad debts, however, significantly consist of the high commodity costs associated with natural gas that was purchased this past winter. It may seem harsh to some, but this is not the fault of other customers, and it is certainly not the fault of transportation customers who arrange and pay for their own gas supplies.

The PSC has suspended the filing and may have hearings later this year.

1209 Penntower Office Center
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Kansas City, Missouri 64111
(816) 753-1122
Fax (816) 756-0373

428 East Capitol
Suite 300
Jefferson City, Missouri 65101
(573) 635-2700
Fax (573) 635-6998