Who’s Afraid of Facts? Legislators Should Let Public Service Commission Live Up to Its Name

St. Louis Post-Dispatch, March 28, 2013

In January 2007, Tom Dempsey was one of 50,000 Ameren Missouri customers in St. Charles County whose homes lost power after a fierce winter storm hit the St. Louis region. Mr. Dempsey’s home was without power for 89 hours.

Like many other Ameren customers, he was angry. Unlike most other Ameren customers, he was in a position to do something about it. At the time, Mr. Dempsey, a Republican, was the majority leader of the Missouri House.

“I have four words for Ameren,” he said at the time. “Get your act together.”

Time, and campaign donations, have healed those wounds. Today Mr. Dempsey is president pro tem of the Missouri Senate. Ameren is one of his most generous corporate donors, having funded Mr. Dempsey’s campaign accounts with more than $16,000 since September of last year. For Ameren, it was money well spent.
On Monday, Mr. Dempsey sent a letter to the Public Service Commission asking it to do a curious thing: Cancel plans to provide legislators with detailed information about a bill Ameren is pushing through the Legislature.

Senate Bill 207 would tilt the regulatory environment in Ameren’s favor in two significant ways. First, it would create a new surcharge to allow Ameren to charge consumers more for investments in infrastructure, like new power plants and transmission lines. The surcharge would enable Ameren to recover costs more quickly than a traditional rate case does, thus decreasing Ameren’s risk and putting the burden on consumers.

Second, the bill would get rid of incentives that reward monopoly utility companies for keeping keep their costs down. In effect, Ameren would be rewarded even if its spending surpasses limits suggested by the Public Service Commission.

Consumer groups, from big businesses like Anheuser-Busch InBev, to organizations representing senior citizens on fixed incomes, have predicted the legislation would raise electric rates with little benefit to ratepayers. Our analysis concurs.

Ameren, of course, disagrees. The company says the legislation will spur investment and create jobs.
The great thing about utility legislation is that there is a way to get beyond the he-said, she-said arguments that dominate most political discussion. The law establishes the Public Service Commission as an unbiased arbiter of such matters. The commission’s job is to analyze the full scope of rate requests made by utility companies, balancing the need for energy with protections for consumers. The law not only allows the PSC to help lawmakers analyze such complicated issues, it encourages it.

On March 15, Sen. Eric Schmitt, R-Glendale, asked the commission to investigate the various claims about what SB 207 would and wouldn’t do and gave lawmakers an unbiased look at the facts.

The PSC, in one of its first acts under new chairman Robert Kenney, a Democrat, agreed to open such a docket. It was a good move. Unfortunately, Ameren pushed back hard, using its influence with lawmakers to persuade several of them, including Mr. Dempsey, to ask the PSC to cancel its fact-finding mission.

That’s right: These lawmakers want to consider SB 207 with less information. We know they are data-averse — their cut-the-income-tax bill (SB 26) proves that — but this is ridiculous.

It almost worked.
On Wednesday, under pressure from commissioner Terry Jarrett, a Republican, the PSC almost took Mr. Dempsey’s advice. Fortunately, the PSC voted to keep its investigation of SB 207 open. For now. But it canceled a planned public hearing and limited the scope of its investigation.

That’s unfortunate. Still, the PSC staff will offer an analysis of the bill. That information should help guide lawmakers.

“A full explanation of the facts simply makes sense,” Mr. Schmitt told us. “That shouldn’t scare anybody.”

Mr. Schmitt is right. The old Tom Dempsey would have agreed with him. Just three years ago he signed a letter asking the PSC to conduct a similar fact-finding mission in an unrelated utility matter. And back in 2007, when he was still angry over his 89-hour power outage, Mr. Dempsey sponsored a bill to limit Ameren’s ability to collect a fuel surcharge in cases when the PSC found that the company was surpassing its earning limits.

At the time, Dempsey called on the PSC to “restore public confidence before granting any increase.”

There’s nothing like an unbiased examination of the facts to restore public confidence. Mr. Dempsey was right to ask for it then. Mr. Schmitt is right to ask for one now.