April 23, 2014

House hears testimony on electric utility infastructure surcharge proposal

A House Committee is considering a change to how the state’s electric companies recover the cost of rebuilding or repairing infrastructure.

Sponsor of HB 398, Representative Jeanie Riddle (second from left), listens as representatives for Empire Electric, Ameren and Kansas City Power and Light testify for the proposal.  (Photo courtesy; TIm Bommel, Missouri House Communications)

Sponsor of HB 398, Representative Jeanie Riddle (second from left), listens as representatives for Empire Electric, Ameren and Kansas City Power and Light testify for the proposal. (Photo courtesy; TIm Bommel, Missouri House Communications)

The proposal, HB 398, would let utility companies ask the Public Service Commission to let them charge customers an Infrastructure System Replacement Surcharge (ISRS) to recover the cost of certain types of infrastructure work or regulatory compliance, without a full rate case.

Irl Scissors with the lobbying group Missourians for a Balanced Energy Future says that means consumers would pay the same increase they would anyway, but spread over time.

“The revenue requirement per each rate class with ISRS or without ISRS will not vary … zero difference. So the only difference between the ISRS model and the current rate making procedure is timing.”

Consultant Morris Brubaker testified against the proposal, saying it would let electric utilities spend more money in less time than they can now.

“If you forever … or for a long period of time spend more money faster, your rates are always going to be higher than they would have been if you hadn’t accelerated those investments.”

Backers and opponents also offer differing opinions of whether the proposal would create jobs, or cause job losses.

Vice President with the Analysis Group, Ajay Jyoti, testified that higher electricity prices generally are associated to job losses.

He says, “In fact a 10% increase in electricity prices will result in over 60,000 jobs lost in the state of Missouri alone.”

The bill’s sponsor, Representative Jeanie Riddle (R-Mokane) says it will create jobs now and in the future. She was joined in that claim by former Ironworkers union president Joe Hunt and St. Louis Labor Council President Bob Soutier.

After over three hours of testimony on Wednesday the hearing was suspended and will resume next Wednesday.