Plan requires power-outage payback

JEFFERSON CITY, Mo. -- A proposal awaiting action by the Public Service Commission would require electric companies to provide credits to customers who endure prolonged or frequent outages.

The commission is expected to consider whether to move forward with the rule in the next couple of weeks, after compiling responses from utilities on what the new standards would cost them. If the commission signs off on the rule, public comments and hearings would be held, and changes could be made before the rule would take effect.

The rule covers various issues on power reliability. But one element likely to generate strong feelings on both sides is the requirement that utilities provide customer credits.

The idea was also part of legislation proposed at the Capitol this spring to hold utilities accountable for power failures, but it never received debate in the Senate.

The proposed reliability rule says investor-owned electric companies must restore power after a major storm within five days. If not, utilities generally would credit customers the greater of $25 or their fixed monthly charge, which is not affected by how much electricity they use. Typically, the fixed monthly charge is less than $25.

For problems during normal weather, the lights would be expected to come back on in 16 hours, or the same credit would apply for customers who told the company the power was out. Other affected customers would get a prorated bill.

Investor-owned utilities cover about 63 percent of Missouri electric customers and are the only ones regulated by the Public Service Commission. Other people are generally served by electrical cooperatives or municipal utilities.

The rule also calls for utilities to credit customers $100 or their monthly charge if they experience -- and tell the company about -- eight or more outages under both good and bad conditions within a year.

Other rules on tree trimming and infrastructure inspections have already gone through the commission but await additional approvals before beginning the public comment process.

The Missouri Energy Development Association said its four investor-owned electric utilities estimated the three rules could collectively cost about $1 billion if changes aren't made.

"What consumers need to ask themselves is what is the value of a small increase in reliability for that billion-dollar price tag?" association director Chuck Caisley said Tuesday.

His group represents AmerenUE, Aquila Inc., Empire District Electric Co. and Kansas City Power and Light.

Caisley said it's unfair to hold electric companies accountable for circumstances they can't control.

"It can be as simple as a curious squirrel getting into a transformer that can bring down power to an entire subdivision," he said.

Public Service commissioner Steve Gaw pushed for the customer credits in the rule and said penalties are needed to get utilities to shape up.

Gaw said he intends to prevent utilities from recouping their costs for the customer credits in their rates.

Recent public hearings to gather input on responses to outages in severe weather illustrated weak spots in some areas, he said.

"We need a system that identifies those earlier," he said Tuesday. "They've suffered through a lot of time in between when their service was not up to the standard to be expected."

Public Service Commission operations director Warren Wood helped draft the proposed rules and said they include a variety of ideas because it's easier to later remove parts of a rule than to add new ideas.

Utilities could seek a waiver from the commission to not follow the requirements.

Public Service Commission chairman Jeff Davis declined to comment on the proposal until later in June.

Another rule on tree-trimming calls on utilities to follow various national guidelines. Utilities already must follow a national electric safety code, but Wood said this state rule is more detailed and sets industrywide standards, rather than companies setting individual policies.

For example, the rule says utilities cannot allow any tree or plant taller than 15 feet within a power line's right of way. They also would have to give property owners at least seven days' notice before cutting down trees.

The rule would require companies to have one-third of trees that need trimming done within a year of the rule taking effect, and all such trees trimmed back within two years.