Area utility set to receive long-awaited rate savings

JEFFERSON CITY, Mo. -- Legislation sent to the governor's desk Thursday aims to fix a legal quirk that currently makes a Southeast Missouri electric cooperative the only not-for-profit power utility in the state subject to rate regulation.

Citizens Electric Corp. officials estimate the change, if signed into law by Gov. Bob Holden, will help reduce the $90,000 it currently pays in annual regulatory costs. Such savings would be passed on to the utility's 26,000 customer-owners in Cape Girardeau, Perry and Ste. Genevieve counties.

"There will be cost savings and flexibility given to the local regulatory process," said Tom Borowiak, interim chief executive officer of the Ste. Genevieve-based company.

The House of Representatives forwarded the bill to Holden on a 128-1 vote. It had already passed the Senate without opposition.

The measure will treat Citizens Electric the same as other rural cooperatives and municipal utilities, which are free to set rates without seeking the permission of the Missouri Public Service Commission. The PSC would retain oversight on safety and efficiency issues.

State Rep. Kevin Engler, R-Farmington, and Senate President Pro Tem Peter Kinder, R-Cape Girardeau, sponsored the measure in their respective chambers. Engler said there was no reason for Citizens Electric to continue to be treated differently.

Citizens Electric's unique legal status resulted from its acquisition of a for-profit utility in 1945. Because the absorbed company served the cities of Ste. Genevieve and Perryville, Citizens Electric lost its status as a rural electric cooperative under the law, though it continued to operate as one.

Utility officials said the situation never posed a problem until federal deregulation of the wholesale electric market in the 1990s.

Prior to deregulation, Citizens Electric, which doesn't generate its own power, was able to sign long-term contracts with wholesale suppliers. As a result it only had to seek PSC approval for rate changes every 20 years or so.

However, wholesalers currently are only willing to sign three- to five-year contracts, which would require more frequent PSC consultations.

Citizens Electric's last rate increase in 2002 took 10 months to be approved and cost the utility $225,000 in added expenses.

The bill is SB 255.

mpowers@semissourian.com

(573) 635-4608