Gas PGA Reforms Stalled

The Missouri Public Service Commission (PSC) has rejected a proposal by customers of Missouri Gas Energy, a division of Southern Union Co. and a natural gas local distribution company (LDC), to modify the LDC's purchased gas adjustment (PGA) clause so that it applies solely to sales customers. The customers had claimed that the structure of the PGA predated provision of transportation service on the system and was currently used as an inappropriate vehicle for collecting nonpurchased gas costs from customers that no longer purchase supplies from the LDC. The PSC ruled, however, that using the PGA clause to recover take-or-pay and

certain pipeline transition costs was the most reasonable way to allocate the costs among customer groups. It added that it intended to review alternative approaches to cost recovery in a separate phase of the case. The PSC also rejected a staff claim that the PSC should act to prevent gas marketers from contracting for transportation on an LDC's system instead of the actual end users of the gas supplies. Re Missouri Gas Energy, a division of Southern Union Co., Case No. GO-94-318, Sept. 19, 1995 (Mo.P.S.C.). tPhilip S. Cross is an associate legal editor of PUBLIC

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