Former officials back effort to put utility measure on ballot

Saturday, September 7, 2002

JEFFERSON CITY, Mo. -- Two former state officials have lent their names to a campaign for a constitutional amendment on the November ballot that would give city utilities the ability to cooperate in the construction of power plants.

Supporters of proposed Amendment 4 announced a campaign committee Friday that is headed by former Republican State Auditor Margaret Kelly of Springfield and former Democratic Secretary of State Bekki Cook of Cape Girardeau.

The constitutional amendment, referred to the ballot by the legislature with little dissent or publicity, would repeal a provision that subjects municipal utilities to state regulation if they join together to build or buy an electric or natural gas plant.

Instead, the proposed amendment would specifically allow joint projects by city utilities that could be financed by bonds.

City utilities would remain under the control of their local governments.

If approved by voters, a group of 24 city utilities are prepared to work together to construct power plants, said Duncan Kincheloe, general manager of the Missouri Public Utility Alliance, an association of the state's 88 municipal electric and 42 natural gas utilities.

City utilities provide electricity to about 400,000 homes and businesses in Missouri and provide natural gas to about 100,000 customers.

Some larger municipal utilities have their own power plants.

But as a whole, Missouri's municipal utilities lack the electricity generating capacity to keep up with average and peak demand.

So many utilities purchase electricity from other generators.

"Contract prices are going up and up," Kincheloe said. "What they would like to do is build power plants so they have more access to energy at the cost of production rather than market prices."

The group of 24 city utilities has been told by bond counsels that its financing would be uncertain unless the constitution is changed, Kincheloe said. It is also unclear how the state Public Service Commission would regulate the joint venture under the current constitutional provision, he said.

Allowing city utilities to cooperate in building new power plants would benefit not only the cities, but also their residents, supporters said.

"The purpose of the change in the constitution is, bottom line, to provide more affordable energy in the future," Kelly said.

Added Cook: "It's a good government change. I think the municipal utilities across the state have done a pretty good job, and to provide them extra efficiency will only give the citizens across the state a better rate."

Although the city utilities are looking to cooperate among themselves, the proposed constitutional change also could allow them to team up with rural electric cooperatives or investor-owned utilities, such as AmerenUE.

The Public Service Commission has taken no position on the proposed constitutional amendment, said Toni Messina, the agency's lobbyist. Under the current provision, the PSC has never had a regulatory case involving partnerships of municipal utilities, she said.

Besides Kelly and Cook, other members of the "Yes on 4" committee include former Missouri Public Service Commission Chairman Karl Zobrist and Martha Hogerty, the recently retired state public counsel, whose office represents the interests of residential rate payers.

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