Area lawmakers cool to plan to cap electric-rate increases

Two Missouri business associations are proposing an electric rate cap to help their stores control costs, but area lawmakers aren’t embracing the idea, at least not yet.

The Missouri Grocers Association and the Missouri Retailers Association want state lawmakers to cap rate hikes at 3 percent annually while preserving strong regulatory oversight by the Public Service Commission (PSC).

“I am not for caps,” said Rep. Rick Francis, R-Perryville. “It seems we do have regulations in place.”

Francis said the PSC regulates rates and requires utility companies to justify rates increases.

Local lawmakers said there is a need for the state to have regulatory power over utility monopolies.

Kathy Swan

State Rep. Kathy Swan, R-Cape Girardeau, said, “The government does have a role to play.”

Swan said it is up to the PSC to determine what is “reasonable (rate-wise) for both sides.”

But in letters to lawmakers, the two business associations said electric rates are growing four times faster than the national average.

Missouri Retailers president David Overfelt wrote, “Annual rate increases are hurting Missouri businesses and citizens on fixed incomes.”

He added, the “unpredictable nature of these rate spikes makes competing against retailers in other states and across the internet extremely difficult.”

Donna Lichtenegger

Overfelt said, “Put simply, if we can’t find a way to better control electricity costs in our state, many Missouri retailers who are already facing ever-rising operating costs and unfair internet competition may call it quits.”

The Missouri Grocers Association echoed that concern.

In a letter to fellow lawmakers, Rep. Dan Shaul, a Jefferson County Republican who is executive director of the Grocers Association, wrote running a family owned grocery store takes electricity.

“Next time you go grab a cold gallon of milk or a hot rotisserie chicken, just imagine how much energy is being used to heat, cool, cook and light your local grocery store,” he said.

“Because margins are so small in this industry, cost spikes like we’ve recently seen in electricity result in unsustainable and uncompetitive cost trends for my members and our customers,” he wrote.

Shaul said the proposed rate cap would save a locally owned grocer an estimated $25,000 over the next five years, while a big-box, super store’s savings would be $170,000.

Overfelt, the Missouri Retailers official, said a 3 percent annual rate cap would be “roughly half of what annual increases have been over the past decade.”

But Swan and Rep. Donna Lichtenegger, R-Jackson, said the issue needs much more study.

Swan and Lichtenegger said they want to know why electric rates have increased so much faster than the national average.

Lichtenegger said, “I would like to see all the facts.”

Swan said as a small-business owner, she understands the cost concerns of grocers and retailers.

“I think the health of our communities depends upon the health of our small businesses,” she said.

At the same time, utility companies must be able to charge rates needed for them to operate, she said.

Francis, who serves on the utility committee in the House, said he is not aware electric rates have increased as dramatically as the retailers and grocers groups have stated.

While not embracing a rate cap, Lichtenegger said, “I think we need a strong regulatory oversight.”

With 2018 being an election year, Lichtenegger said she doubts the Legislature in the coming session will approve any major changes to utility regulations.

mbliss@semissourian.com

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