Missouri lawmakers power up for electric special session

JEFFERSON CITY, Mo. -- Missouri lawmakers returned for a special session Monday to consider legislation that would allow lower electricity rates for two manufacturers supporters say could return jobs to a region in the southeast part of the state that's suffered economically since a major aluminum smelter closed last year.

Two metal-manufacturing companies have expressed interest in operating in the area near New Madrid. But supporters of the legislation said they likely won't do it unless they can negotiate a cheaper electric rate with a longer contract than is allowed under current law.

Some lawmakers and consumer advocates said the legislation would allow Ameren -- the state's largest electric company -- to raise prices for residential customers and bypass the state's Public Service Commission, which regulates investor-owned utilities.

The proposal would allow companies such as Ameren to negotiate a rate lower than the cost of service with the steel mill and aluminum smelter and would allow them to negotiate a longer contract.

It also includes a provision that would allow the Public Service Commission to authorize Ameren to use power lines outside its jurisdiction to reach the proposed steel mill.

New Madrid city administrator Richard McGill said a company that has remained anonymous during negotiations has expressed interest in breaking ground on an $82 million to $100 million steel-mill project in the area.

But it won't do it unless it has the lower electric rate, and it wants to decide on a location by June 30 at the latest, he said.

The company also is considering sites in other states where it can get cheaper electricity rates, McGill said.

"We know that this is the first step that they need," McGill said. "I couldn't be more optimistic (that the company would come to Missouri) if that passes."

The steel mill could bring at least 95 jobs to the area, said bill sponsor Republican Rep. Don Rone.

Separately, a Switzerland-based company could reopen the former Noranda aluminum smelter that closed last year to create about 400 more positions over the first two years, Rone said.

Cheap electricity is vital to the operations of metal-making companies, said Warren Wood, Ameren Missouri vice president of external affairs and communications.

When the Noranda aluminum smelter was operating in New Madrid, it used as much electricity as the city of Springfield, Missouri, Wood said.

But consumer groups and some lawmakers have called the proposal a veiled attempt to open the door for major manufacturers to get favorable rates and to enable Ameren to raise rates for residential and business customers.

"We understand that jobs are needed across the state," said Consumers Council of Missouri Executive Director Cara Spencer. "But wrapping up massive utility legislation with the lure of bringing in jobs is really, really an unfortunate way to mask legislation that is really written by and for public utility companies."

Lawmakers will consider the legislation this week. During special sessions, they are only allowed to discuss the topics that are called for by Gov. Eric Greteins.

The first-term Republican governor held weekend rallies in Southeast Missouri in support of the legislation and plans another rally today at the Capitol to try to build public support for the measure.

The House approved a similar proposal during the regular legislative session, but the measure stalled in the Senate before the session's May 12 deadline to pass bills.

Senate Majority Leader Mike Kehoe seemed optimistic the measure could pass the Senate this time.

"We don't want to miss the opportunity for jobs," Kehoe said. But he added: "I think our folks have a lot of questions."