Natural Gas Price Increases in Kansas City

RCED-84-77: Published: Feb 10, 1984. Publicly Released: Feb 27, 1984.

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Natural gas prices in the Kansas City, Kansas and Missouri, metropolitan area almost doubled between 1981 and 1983. Pursuant to a congressional request, GAO determined the factors responsible for these recent increases. The resulting study does not contain conclusions about the appropriateness of government or private organization action, nor does it include any recommendations.

GAO found that about 75 percent of the increase was due to the supplier's high gas purchase costs, and the remaining increase stemmed from operation and maintenance costs, taxes, depreciation, interest, return on equity, and other expenses. In April 1983, the supplier reduced its rates to the distributor, which in turn reduced its rates to retail customers. The result was a decrease of about 20 percent in the per-unit cost of gas to a residential customer.

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