Legislative War on Utilities

JEFFERSON CITY — Never have household checkbooks had so much to fear from Jefferson City politicians. Since Missouri elected a new governor and several new legislators this past November, utility lobbyists have been drafting up new schemes to squeeze ever more dollars from unsuspecting utility consumers. Over 100 utility lobbyists have registered with the Missouri Ethics Commission, including many former legislators, as well as former Public Service Commission (PSC) commissioners.

It is not news is that utility companies are trying to find ways to bypass the PSC and pass rate increases through surcharges and other complicated mechanisms—such proposals are an every year event. What is new this year is the increasing number of proposals and the increasingly frantic pressure being applied by utility lobbyists and affiliated organizations for a “fix” to the PSC process with absolutely no evidence of a problem.

Missouri lawmakers have been generally cautious in the past about these repeated attempts to shift the business risk of monopolies onto the backs of captive ratepayers. Few of those proposals in the past ever became law. Missouri has thankfully avoided many of the legislative mistakes bordering states made in adopting utility proposals to change their rate-setting laws, adding such methods as Construction-Work-In-Progress and Formula Rates. Those states are now left debating bailouts for big power plants that are having trouble surviving the current energy marketplace, or forcing ratepayers to pay for other bad utility investments.

What has does that mean for Missouri? On average, Missouri electric rates are currently among the lowest in the Midwest. This is an incredible benefit for our state economy. But this could be wiped away entirely by legislation currently pending in the State Legislature.

So what needs to be fixed: profits? The biggest monopolies here in Missouri–Ameren Missouri, KCPL, Laclede Gas (Spire), and Missouri-American Water Company—have been making very generous profits, enjoying increasing dividends, as well as soaring stocks prices.

Reliability? Both Ameren Missouri and KCPL currently have the some of the highest electric reliability data in the Midwest. Low rates, high reliability, and profitable utilities. What is wrong with this picture that needs to be “fixed”?

Nonetheless, more than a dozen pending measures that would increase regulated utility rates have already passed out of utility-friendly committees so far this 2017 legislative session. Here are just some of the pending proposals that have the potential to add up to significant sums of money on top of current household utility bills:

Electric Ratemaking Legislation Rewrite
Senate Bill 190 – (Sen. Ed Emery and Sen. Jamilah Nasheed); House Bill 628– (Rep. Rocky Miller). This sweeping legislation would make numerous changes to the current ratemaking system, causing rates to rise faster and increase higher for the same level of service, costing Missourians hundreds of millions. To make matters worse, this legislation includes lower rate for one company: Doe Run, subsidizing their rates by rate increases on ordinary households.

Water Utility Decoupling Profits from Usage
Senate Bill 184 – (Sen Ed Emery); House Bill 243 (Rep. Charlie Davis).This legislation would allow water companies to automatically increase water rates annually to cover losses from decreased consumer usage that could result from abnormal weather, an economic downturn, or other disaster. Ratepayers would essentially have to guarantee profits, shielding a for-profit company from decreased profits.

Other legislation that would raise utility rates include formula rate bills for Natural Gas Companies: SB 242 – (Sen Ed Emery) and House Bill 747 (Rep. Rocky Miller); Performance Based Rates creating automatic, allowing for 5-year pre-approval plans for electric companies SB 214 – (Sen. Ed Emery); and a New Surcharge Authorization bill, that would open the door to unlimited new surcharges HB 997 — (Rep. Rocky Miller).

But consumers have some hope. A few legislators have been bravely standing up for consumers. “Sen. Gary Romine, Sen. Doug Libla, and Sen. Jill Schupp represent a few brave voices speaking up against a torrent of utility propaganda.” says John Coffman, utility counsel for Consumers Council of Missouri.

“It’s Not the Grid; It’s the Greed” has been the rallying cry of this legislative bulwark against numerous utility rip-off schemes. Unfortunately, many more state legislators are working with the utilities to make changes that would raise utility rates.[1] Meanwhile, Missouri has too many other serious problems for our State Legislature to waste precious time figuring out how to increase utility profits.”