Small area utility firm is seeking relief from regulation

JEFFERSON CITY, Mo. -- A not-for-profit power utility that serves customers in three Southeast Missouri counties is asking lawmakers to fix a legal quirk that makes it the only such company in Missouri subject to full state regulation.

Dan Rodamaker, chief executive officer of Citizens Electric Corp., told a House committee on Tuesday that local control of such decisions by the customer-owned utility would enable it to reduce regulatory costs.

"We are trying to save money for our customers," Rodamaker said.

Regulation by the Missouri Public Service Commission costs the Ste. Genevieve-based utility $90,000 a year, Rodamaker said. When Citizens Electric sought a rate increase last year, it incurred an additional $225,000 in expenses for attorneys and consultants during the 10-month process of winning PSC approval.

Regulatory costs are passed on to the approximately 26,000 customers in Ste. Genevieve and Perry counties and northern Cape Girardeau County served by the utility.

Identical bills heard by committees in both legislative chambers on Tuesday would treat Citizens Electric like rural cooperative and municipal utilities, which aren't subject to PSC rate regulation. Rates instead would be determined by the utility's governing board of customer/owners.

The sponsors -- state Rep. Kevin Engler, R-Farmington, and Senate President Pro Tem Peter Kinder, R-Cape Girardeau -- have requested the measures be designated consent bills, a fast-track status for noncontroversial legislation. No one testified against the bill.

The PSC generally only regulates the rates of private, for-profit utilities. Its oversight of Citizens Electric, despite its nonprofit status, results from a deal the utility made 58 years ago.

The utility was founded in 1941 as Genevieve Electric Cooperative and as an rural cooperative wasn't subject to many state edicts. However, that changed a few years later when it purchased a financially distressed utility that served a wider area.

Because the expanded operation would provide electricity to the cities of Ste. Genevieve and Perryville, it lost status as a rural cooperative.

Victor Scott of Jefferson City, Citizens Electric's attorney, said the unique status never posed a problem until federal deregulation of the wholesale electricity market in the 1990s.

Citizens Electric, which doesn't generate its own power, hadn't raised rates in 20 years prior to 2002. Before deregulation, it signed long-term contracts with wholesale suppliers.

Because of changes in the market, Scott said, Citizens Electric is now only able to secure three- to five-year contracts, meaning more frequent -- and costly -- visits to the PSC.

Committee action on bills typically takes place one week after hearings.

The bills are HB 208 and SB 255.

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