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Spire Improperly Charged Gas Customers Millions For Pipe Replacements, Court Rules

Josh Graciano | Flickr

A Missouri appeals court has ordered the natural gas company Spire to pay customers at least $4 million in reimbursements after it improperly charged them for pipe repairs.

In a trio of decisions, judges from the Missouri Western District Court of Appeals ruled the utility improperly used surcharges to fund infrastructure improvements that were not eligible for those fees.

In one decision, Judge Anthony Rex Gabbert ruled that the company didn’t have the right to charge customers for 2018 improvements to metal pipes, because it had not proved the pipes were deteriorating.

“In order to succeed or be allowed to be granted recovery of those rates, [Spire] had to prove … that they were replacements for pipes or components that were in a worn-out or deteriorated condition,” said John Clizer, a lawyer for the Missouri Office of Public Counsel, a state agency that protects the rights of utility customers. “The court found Spire failed to provide sufficient evidence to show those pipes met the necessary qualifications.”

Utilities companies can charge customers additional fees for improvements outside of annual rate increases if the company proves those improvements meet certain standards to a state utility commission, he said. That didn't happen.

In another decision, Judge Thomas Chapman upheld a decision from the state Public Service Commission that the company had improperly collected $3.1 million in surcharges to fund repairs of plastic pipes. Chapman wrote that plastic pipes are not eligible to be repaired with such a surcharge.

Spire representatives say they disagree with the decisions and plan to challenge at least one in the state Supreme Court. 

It’s unclear how much Spire must refund its customers, but Clizer said the court had estimated the total cost due to ratepayers from two of Tuesday’s decisions was more than $4 million. The reimbursements for one other decision were still being calculated.

Spire disagrees with the court’s rulings and is determining how the decisions will affect the company, said public communications manager Raegan Johnson.

“We’ll continue to replace the infrastructure and put the safety of our customers and our community first,” she said.

Spire serves more than 500,000 customers in 38 Missouri counties. 

Correction: A previous version of this story misidentified which party failed to provided the evidence of deteriorated pipes. The court found that Spire was at fault for that. 

Follow Sarah on Twitter: @petit_smudge

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