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Spire Energy: Show Me Careers Educator Experience

Ronald Buckner, a general fitter for Spire from Black Jack, disconnects a gas meter as part of a demonstration while local teachers watch on Thursday, June 6, 2019, at Spire Energy in Shrewsbury. Photo by Brian Munoz, bmunoz@post-dispatch.com

ST. LOUIS — The St. Louis-based natural gas company Spire said this week that it was justified in replacing pipes and charging customers, and that it didn’t expect further court challenges to its pipe replacement program.

But Spire Missouri President Scott Carter also warned that last week’s court decision could disrupt the pace of future pipe upgrades. “This just throws a lot into question,” Carter said this week.

A week after a court panel ruled that the natural gas company overcharged customers, Spire responded at length to the decision that triggered the cancellation of a quarterly earnings call, and sent its stock sliding.

The utility issued a defiant statement Monday that laid out its disagreements with the Western District Court of Appeals’ Nov. 19 ruling. At question is how the company charged customers for pipeline replacement: Whether it could recover costs quickly through a surcharge, or if it had to wait longer for regulatory approval.

The court said that the company should not have charged customers in 2016, 2017 and 2018 for work that included replacing sections of plastic pipeline “not worn out or in a deteriorated condition.”

Spire insisted in its statement on Monday that the charges were justified and pledged to appeal.

On Tuesday, Carter added explanation in an interview with the Post-Dispatch. He said the company’s last-minute move to postpone its earnings call six days, to Nov. 26, was necessary to accurately assess the implications of the court ruling, and to calculate the cost.

“Since it came out on the day before we were supposed to announce those earnings, we had to take a pause, and make sure we understood what the ruling said, what the financial implications were, and to make sure we were correctly and accurately disclosing that,” Carter said.

The amount of revenue collected from the disputed surcharges is up to $12 million — “or about $10 for the average Missouri homeowner,” according to Spire. Depending on the outcome of the appeals process, the company said that “the appropriate refund, if any,” would be determined at a later date by utility regulators at the Missouri Public Service Commission.

Carter emphasized that the court ruling did not generally challenge the need to upgrade piping. But he also acknowledged that Spire will now have to prove that pipes being replaced are indeed worn out.