Legislation would let utilities raise prices without PSC wait

Friday, March 1, 2013

Legislation to allow Missouri public electric utilities to charge customers for improvements as needed instead of waiting for rate change approvals from the Public Service Commission [PSC] was approved by a state Senate committee and is being heard in the House of Representatives.

Opponents say the changes would allow too little oversight in rate increases, putting consumers at risk.

Two bills -- listed as SB 207 and HB 398 -- are an effort to avoid sudden rate hikes caused by periodic increases made to offset infrastructure improvements or repairs, said John Hancock of the Missouri Electric Alliance, which is made up of Ameren Missouri, Kansas City Power & Light of Kansas City, Mo., and Empire District Electric Co. of Joplin, Mo.

Currently, utilities must make a "rate case" that can take a year or more for approval in order to adjust prices. Once the rate case is approved, prices can jump, depending upon the capital outlay made by the utilities in previous years. Rural co-ops and municipal utilities are not subject to the same approval process, Hancock said.

The new rule would allow public electric companies to obtain approval from the PSC through a less-rigorous Infrastructure System Replacement Surcharge [ISRS] process and make changes immediately of up to 2.5 percent per year or no more than 10 percent over a period of four years.

The adjustment would be reviewed in depth as part of the normal rate-change process. Public gas and water utilities already have ISRS procedures in place, Hancock said.

The bills under consideration stipulate that if the improvements are determined by the PSC to be unnecessary, customers would receive a refund, plus interest, he said.

Opponents say the new rules offer a "blank check" to the utilities.

"It is a 'take citizens money now, ask questions later, approach," said Chris Chris Roepe, director of the The Fair Energy Rate Action Fund [FERAF], whose members include AARP, Missouri Association for Social Welfare, Consumers Council of Missouri, Missouri Association of Retailers, Ford Motor Company and Noranda Aluminum.

Sen. Mike Kehoe, R-Jefferson City, introduced SB 207; Rep. Jeanie Riddle, R-Mokane, introduced HB 398. The bills are scheduled to move to the Senate floor for debate.

Phone and email messages left with Kehoe Thursday morning were not returned.



Pertinent address:

Jefferson City, MO

Mokane, MO

Map of pertinent addresses

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