Item 8.01 Other Events.
In 2015, Spire Missouri Inc. ("Spire Missouri"), the primary gas utility in the
St. Louis region, identified a critical need to address reliability and
affordability for customers amid changing natural gas market dynamics. Spire
Missouri entered into discussions with several pipeline project developers to
construct and operate new interstate pipeline facilities to connect the greater
St. Louis region to additional sources of gas supply. When none of the project
proposals satisfied all of the needs for the St. Louis region, Spire STL
Pipeline ("STL Pipeline") was formed to develop a 65-mile interstate pipeline to
bring natural gas from the Marcellus, Utica and Rockies production regions via
the Rockies Express (also known as, REX) Pipeline.
The Federal Energy and Regulatory Commission ("FERC") issued certificates
approving construction and operation of the STL Pipeline in August 2018
following a thorough and rigorous regulatory review. Since becoming fully
operational in 2019 and being expanded with additional pipeline interconnects in
2020, the STL Pipeline has proven to be a critical source of energy supply for
more than 650,000 Missouri households and businesses. Without the STL Pipeline,
Spire Missouri has estimated that during Winter Storm Uri in February 2021, a
substantial number of customers would have been without gas service and all
customers overall would have experienced significantly higher gas costs.
As previously disclosed, two parties requested rehearing of the August 2018
certificate order, which requests were denied by the FERC. On January 21, 2020,
these two parties filed petitions for review of the FERC's orders with the U.S.
Court of Appeals for the District of Columbia (DC) Circuit ("Court"). On June
22, 2021, the Court issued a judgment vacating STL Pipeline's certificates and
remanding the proceeding back to the FERC, although vacatur does not take effect
until after the expiration (or denial) of the Court's opportunity to reconsider
its decision.
Spire Missouri relies on the STL Pipeline to transport natural gas into the St.
Louis region. In the event the STL Pipeline is taken out of service, Spire
Missouri's ability to secure new pipeline contracts on other systems serving the
region is significantly constrained, and Spire Missouri would not be able to
replace that supply based on current market and operating conditions. Without
the availability of the STL Pipeline, Spire Missouri may have to develop and, in
the event of prolonged cold weather next winter, implement a curtailment plan in
which it would have to allocate gas to its customers based upon need, leading to
potentially significant service disruptions for customers.
Spire Missouri will continue to pursue all legal and regulatory avenues to
ensure access to reliable, affordable and safe delivery of energy for Eastern
Missouri. If Spire Missouri is unable to obtain sufficient pipeline capacity to
meet its customers' annual and seasonal natural gas demands, Spire Missouri's
financial condition and results of operations may be adversely impacted.
--------------------------------------------------------------------------------
© Edgar Online, source Glimpses