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City Utilities Proposes Increase of Gas Rates

City Utilities of Springfield has proposed an increase to its gas rates less than three months after the state auditor criticized the utility for turning too high of a profit margin. City Utilities cites increased maintenance expenses and reduced gas usage by its customers as the reasons for the proposed increase. KSMU's Greg Leuthen has more.

City Utilities wants to increase your gas rates by 4.1 percent beginning in October. Joel Alexander, the Supervisor of Communications for City Utilities, says the proposed increase will cover the costs of gas line expansions and other maintenance related expenses. He also says the decrease in gas usage by customers factored into the proposal.

Less than 3 months ago, State Auditor Susan Montee criticized City Utilities for charging its customers too much for utilities, saying that the utility should not have enough money to subsidize non-utility activities. Montee does acknowledge that City Utilities is losing money from its gas services, but she says that if the gas rates rise, the electric rates should decrease.

City Utilities has projected it will need an increase of 2.9 percent for 2010, which means that gas rates could increase by 7 percent if both proposals are passed by the Springfield City Council. The board of public utilities will meet on March 27th to decide whether or not to move forward with the increase. If it is approved, the proposal will then be addressed by Springfield City Council.