Senate passes electric-rate bill to benefit possible Bootheel aluminum smelter, steel mill

The Missouri Senate approved legislation Friday that sets the stage for lower electric rates to encourage reopening of an aluminum smelter and possibly entice a steel mill to New Madrid County.

The measure passed 24-5 in the special session called by Gov. Eric Greitens for just that purpose.

House lawmakers approved the bill by a vote of 120-17 Wednesday, two days after being introduced in the special session.

Supporters said the legislation, which is expected to be signed by the governor, could bring 500 jobs to an impoverished area of the Bootheel.

Sen. Doug Libla, R-Poplar Bluff, who had been criticized by Greitens for opposing electric-rate legislation in the regular session, backed the House bill that passed the Senate on Friday.

Wayne Wallingford

“I am excited,” Libla said in a telephone interview with the Southeast Missourian after the bill’s passage. The House passed it earlier in the week.

Libla said he supported this measure because it provided a mechanism for large electric users to request lower rates but preserves the authority of the Missouri Public Service Commission (PSC) to regulate utility rates.

The regular-session bill would have diminished the commission’s regulating authority on behalf of ratepayers, Libla said.

“I have been up here five years fighting against large monopoly utility companies that have no competition,” he said. The PSC exists “to have fair and equitable rates,” he said.

The special-session bill provides an opportunity for special, lower rates, but the final decision would rest with the PSC, Libla said.

“It has worked out exactly the way I wanted it to work out,” Libla said. “It is a win-win situation.”

The governor waged a campaign in favor of the proposal — including a rally outside the Capitol and campaign videos showing him lobbying for the measure with residents of Southeast Missouri. The region is home to some of the poorest counties in the state.

“This was so important because we told people during the campaign that we’re going to come here and we’re going to fight for them,” Greitens told The Associated Press after Friday’s vote. “I’m really proud of the fact that we’ve got this victory.”

Supporters of the bill hope the legislation will lure two businesses to the Bootheel, where the closing of a Noranda aluminum smelter last year eliminated more than 900 jobs.

A Switzerland-based company bought the plant and expressed interest in reopening part of it through a subsidiary, Magnitude 7 Metals. But those jobs haven’t come to fruition, in part because the company needed a lower electricity rate, The Associated Press reported.

A business from India has looked at opening a steel mill in the area, potentially bringing more than 200 jobs, The Associated Press quoted New Madrid city administrator Richard McGill as saying. The company also has looked at sites in West Virginia and New York.

Greitens told The Associated Press he spoke with both companies and is confident the steel company would choose New Madrid. McGill said the company wants to pick a site by June 30.

But the legislation offers no guaranteed jobs, and some lawmakers said the legislation could enable companies such as Ameren — Missouri’s largest electricity provider — to raise rates on average customers.

Libla and Sen. Wayne Wallingford, R-Cape Girardeau, said PSC staff have indicated residential and business customers likely would see little increase in their electric bills.

An analysis from the commission concluded average ratepayers likely wouldn’t see a change in their monthly bills if a new steel mill came to New Madrid.

If the aluminum smelter reopens, ratepayers could see a maximum $54 increase per year after 10 years if energy-cost inflation would rise by 10 percent annually, according to the report cited by The Associated Press.

But Wallingford and Libla said they don’t see that happening. A greater energy load could help hold down rates, they said.

While the measure would allow large-energy users around the state to request lower electric rates for their plants, Wallingford said few industries outside of smelters and steel mills would meet the 50-megawatt-per-month threshold to do so.

Wallingford said he asked Libla “to carry” the House bill in the Senate because the proposed economic development would be in his district. Libla agreed to push the bill.

The Cape Girardeau Republican said, “I could have been the hero of the day.” But he said he wasn’t looking to get the credit.

Wallingford, who served on the Senate committee that easily approved the House bill to send it to the floor, said he urged his colleagues not to add amendments to the House bill.

Adding amendments could have “killed the bill,” he said.

In the end, senators passed the measure without amendments.

mbliss@semissourian.com

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