May 5, 2015

Ameren Missouri electric rate increase approved, Noranda gets decrease

Ameren Missouri gets the approval to increase electric rates, but one southeast Missouri company will pay a lower rate.

Ameren Missouri's Callaway Energy Center

Ameren Missouri’s Callaway Energy Center

The Missouri Public Service Commission has authorized a rate increase of nearly $121.5 million, which is approximately $142 million less than what Ameren requested in July of 2014.  Noranda Aluminum is Ameren’s biggest customer, but company officials said higher rates would force the company to shut down.  Noranda Aluminum operates a smelter in New Madrid and purchases more than 10 percent of all Ameren’s electricity.

Public Service Commission Chairmen Robert Kenney said residential customers will see an estimated rate increase of a little over 5 dollars a month and explains why Noranda will receive a lower rate.

“If Noranda left Ameren’s system all together, all of what Noranda is currently paying would then be shifted to other customers and that shift would be greater than the decrease we’ve allowed,” said Kenney.  “It’s in the public interest and better for the remaining rate payers for Noranda to continue taking service from Ameren than if they shut down and left.”

Kenney said Noranda would be required to meet certain requirements in order to receive a discounted rate.

“There are employment levels that have to be maintained at the smelter, there are restrictions on their ability to pay special dividends to their shareholders, and there was a requirement that a certain level of capital expenditure be made at the plant itself,” said Kenney.

Ameren claims it needed to raise rates due to continued investment in the company’s generation and energy delivery systems, large investments in environmental controls at the company’s Labadie Energy Center, and a new reactor vessel head at the Ameren Missouri Callaway Energy Center.  It also cited escalating net energy costs, the recovery of solar power investments, and customer rebates as other driving factors to increase rates.

The rate increase is Ameren’s 6th rate increase since 2007.

Missouri legislature proposes new limits on unemployment benefits

The Missouri legislature has proposed shortening the length of time a person can stay on unemployment benefits by tying that limit to the unemployment rate.

Representative Scott Fitzpatrick (photo courtesy; Tim Bommel, Missouri House Communications)

Representative Scott Fitzpatrick (photo courtesy; Tim Bommel, Missouri House Communications)

The plan would allow unemployment benefits for up to 20 weeks when the average unemployment rate is nine percent or higher, to as few as 13 weeks when the rate drops below six percent.

Backers say the bill is needed to bolster the state’s unemployment fund, that has become insolvent during recent downturns in the economy.

The Missouri Chamber of Commerce backed the bill through its path to the governor’s desk.

“Following the last recession, Missouri’s unemployment insurance system became insolvent and had to borrow money from the federal government to cover claims, and employers paid millions in interest alone on the borrowed funds,” Chamber president Dan Mehan said.

He said Missouri is the only state that has had to borrow funds from the federal government to cover benefits to unemployed workers in the past five economic downturns.

“We need to take steps to keep the fund from chronic insolvency. This bill does that,” said Mehan.

Opponents like Representative Sheila Solon (R-Blue Springs) said the bill would make it harder for people who have lost a job to make ends meet or get an education toward a new career.

“Unemployment insurance is not welfare. It’s insurance. It provides help to people who have lost their jobs through no fault of their own to cover the gap until they can find a job,” said Solon. “It helps put gas in their car, food on the table, and it helps pay the rent or their mortgage so they don’t lose their home.”

The state Senate amended the bill to include severance and termination pay in the definition of wages. The result would be that a person would not start receiving unemployment benefits until after severance or termination pay runs out.

House Democrat leader Jake Hummel (D-St. Louis) argued that would hurt a person’s ability to change professions after being laid off.

“When these people get laid off what they’re doing is they’re taking these packages, these payouts, they’re going to school, and learning a new skill,” said Hummel. “It seems like we’re pulling the rug out from under them at a time when they need it most.”

The House passed the original bill 112-47 in February, but the version with the Senate amendments received only 88 “yes” votes. Its House sponsor, Representative Scott Fitzpatrick (R-Shell Knob) says he thinks the difference in vote totals is a result of the amendment adding severance and termination pay to the definition of wages.

“I think it was probably the amendment that Senator (Mike) Kehoe added that got some folks in the organized labor community concerned and they started contacting people on this side of the building, and that, I think, resulted in a lower vote total.”

The second House vote is 21 short of the total supporters would need to overturn a veto by Governor Jay Nixon (D) if that is the action he takes on the bill.

The Senate passed the bill 21-8.

Bacon business expands operations to build new plant in Missouri

A new meat processing plant has made plans to set up shop in northwest Missouri.

Daily’s Premium Meats is expanding its operations to build a new plant that will be processing bacon in St. Joseph.  Daily’s Premium Meats is part of an integrated system owned jointly by Triumph Foods and Seaboard Foods.

Missouri Agriculture Director Richard Fordyce said the plant will further process pork coming from the Triumph Foods plant in St. Joseph.

Daily's Premium Honey Cured Bacon

Daily’s Premium Honey Cured Bacon

“They will literally take product out of the Triumph plant, literally take it across the street, and add further value and produce bacon,” said Fordyce.

Director of Communications David Eaheart said the plant will be built from the ground up and it will be across the street from the Triumph Foods pork processing plant.  Eaheart said the company chose St. Joseph for a couple of reasons.

“Triumph Foods is part of our food system and will be supplying pork bellies to it, so logistically it made sense,” said Eaheart.  “The city of St. Joseph offered incentives and a package that was very attractive to Daily’s.”

The Missouri Department of Economic Development claims it has offered a strict incentive package that the company can receive if it meets strict job creation and investment criteria.  The company’s expansion project includes an initial capital investment of $41.5 million.

Eaheart said the expansion project will create jobs.

“The plant will employ a little over 200 people and a lot of those will be working on the productions lines where they’ll actually be smoking, curing, slicing bellies, primarily for the food service market, which Daily’s specializes in,” said Eaheart.

Daily's Cherry Apple Wood Smoked Bacon

Daily’s Cherry Apple Wood Smoked Bacon

Construction of the 100,000 square-foot plant is scheduled to begin this summer and the company expects to be fully operational by May 2016.

“If all goes as planned with the construction of the plant, it should start operations in May, so it will sometime next spring or late winter when we’ll start looking to fill positions,” said Eaheart.

Daily’s Premium Meats was founded in 1893 in Missoula, Montana.  It’s sliced-to-order bacon is sold to national restaurant chains, local restaurants, and food service distributors.  The company is also trying to build its retail customer base.

Nixon-led Missouri trade mission to Europe enters last leg

A Missouri trade mission led by Governor Jay Nixon has gone from Germany to Spain.

Governor Jay Nixon and other Missouri trade delegation members meet with BMW executives in Munich, Germany.  (courtesy; Governor Nixon's Twitter account, @GovJayNixon)

Governor Jay Nixon and other Missouri trade delegation members meet with BMW executives in Munich, Germany. (courtesy; Governor Nixon’s Twitter account, @GovJayNixon)

The Governor says he wants to do three things with this trade trip: thank those companies that already trade with Missouri, let Missouri business leaders meet with their customers, and to look for ways to expand the already strong trade market Missouri has in Europe.

“I think we’re in a growth zone here. I mean, you’re seeing the economy of our state pick up and I think the fact that we are a great place to do business, I think we’re going to continue to see growth in this export sector to Europe,” Nixon told reporters on a conference call from Munich.

The trip has also visited Italy. Between the three countries it has stopped in, Missouri exports exceeded $577-million in 2014. Nixon hopes to increase Missouri exports, which he said reached $14.1-billion last year, the second highest year on record.

“2012 and 2014 were the two best years on record for export of Missouri goods, and these companies with us and a myriad of others will help us in continuing to create more jobs and make more exports,” said Nixon.

Nixon did not say that any new deals have been sealed during this trip.

Missouri has received international attention since August, when 18-year-old Michael Brown, Junior, was fatally shot by a Ferguson Police officer. Nixon says, though, that incident and the unrest that followed have not been major topics of discussion in his meetings with foreign officials.

“Just the fact that folks were aware of it because of the significant attention that it got, and that we appear to be trying to do some things concretely over the long run that are going to make a difference,” said Nixon.

The trip ends Saturday. It is being paid for by a nonprofit economic development group.

Missouri engineer wants a rebuilt I-70 to support vehicles with no drivers

An electrical and computer engineer from Raytown wants to rebuild Interstate 70 with so-called “smart pavement” technology to allow for vehicles with no drivers.

Electrical & Computer Engineer Tim Sylvester

Electrical & Computer Engineer Tim Sylvester

President of Integrated Roadways Tim Sylvester, will present his plan to Department of Transportation officials and the Missouri Highways and Transportation Commission next week.

“We plan to present a public/private partnership to rebuild I-70 using smart pavement,” said Sylvester.  “Smart pavement provides intelligent transit services as a subscription service in order to support driver-less vehicles and wireless electric vehicle charging.”

Sylvester said smart pavement also has the capability to provide WI-FI to the general public traveling the interstate.  He said there would be no difference in the visual appearance of the road.

“Smart pavement is a pre-cast pavement system that has a variety of sensors in the pavement and communication services to provide location and navigation information to support driver-less vehicles,” said Sylvester.

Sylvester said profits from the subscription-based service would be shared with MoDOT, but drivers are not required to have it in order to drive on the interstate.

“After ten years of implementation of this service, the profits shared with the Department of Transportation would essentially double their budget,” said Sylvester.  “If you don’t subscribe, you’re just using it like a road.”

Sylvester thinks the service would appeal to commercial fleet operators and suggests the commercial trip fee would be two and a half cents per ton, per mile.

“This is primarily geared towards commercial fleet owners who can save about 15 percent on their shipping costs by using this service and double their shipping capacity, but it would also be available to private drivers,” said Sylvester.

Sylvester said smart pavement is more cost-effective than vehicles that can drive themselves made by Google or Mercedes.

“Those cars are hundreds of thousands of dollars and they’re not going to be cheaper for decades,” said Sylvester.  “We can make driver-less a lot cheaper and a lot more accessible by providing it as a subscription using sensors installed in the roadways.”

Sylvester said users would need to install a system into the vehicle similar to a Garmin after-market navigation unit or a GM OnStar kit.  Sylvester estimates the target price to install a driver-less system would be near $1000 to $1500 for passenger vehicles and a little more for commercial vehicles.

“The technology that we’re talking about to upgrade your vehicle is so much simpler than if you’re trying to upgrade your vehicle to be driver-less completely on its own without any sort of outside support,” said Sylvester.

Sylvester is planning to ask MoDOT for their recommendation to go forward with a pilot project to test the technology.  Sylvester said it would be a one mile stretch of road with smart pavement, but it would not be on I-70.

“It would take place somewhere that we’d be able to interrupt traffic and nobody would get upset with us,” said Sylvester.

Sylvester said the biggest obstacle against his smart pavement project will be dealing with political and legislative issues.

“We’ve got to get legislation for driver-less cars and we’ve got to get legislation for public/private partnerships,” said Sylvester.  “The best thing that the average person can do in order to support this is to call their legislator and voice their support and advocate for improving I-70 in a way that prepares us for the future and for all of the exciting technology to come.”

Sylvester said MoDOT estimates it would cost between $2- and $4 billion to rebuild I-70.  Sylvester estimates his smart pavement would cost $3.6 billion, but said MoDOT would only be responsible for 10 percent of the project under his public/private partnership plan.