After a ceremony dedicating the collection of photographs of all 97 commissioners in the Public Service Commission’s history, Chairman Robert Clayton reflected on the commission’s purpose.
“Well if you go back to the beginning, in 1913, most people did not have electricity. Private companies stepped forward and said they would serve a community but said they would only do it if they were the only game in town. It was so expensive to have two or three companies stringing up lines and poles and transformers and power plants that really it makes sense economically to have one provider, have them be heavily regulated, and prices set by another entity,” Clayton said.
Shorty after that, the need for the Commission became clear.
“At first, prices were set by elected officials, legislators. That of course made it quite difficult for a legislator to go home after raising rates. That’s when it was decided an independent body would be appointed, acting like judges, to make these very difficult decisions. Frankly, with service of electricity, natural gas or water, the same principles are applied today that they were in 1913,” Clayton said. “Three of the five commissioners establish a majority, will makes decisions on rules, on policy, on rates, on pretty much all aspects of delivery of utility service across the spectrum.”
While the public hears about the decisions the commission makes on utility rate hikes, there’s much more the commission does in the day-to-day.
“We have a very intensive auditing process. We also have engineers that make determinations about whether a utility has put up the right number of lines, the right number of poles, are they using the right type of equipment? So we are engaged in those processes. We don’t make the decisions for them, but we ensure that they make the best possible decision for the circumstances and that’s what gets passed on to the rate payers,” Clayton said.
But Clayton says it can be a challenge to be an island in Jefferson City.
“We’re supposed to be an independent agency. There are some that would like to manipulate our process or engage in our process,” Clayton said. “Yes, there’s always political pressure that comes by at our agency. But it over the years it comes and goes and we’re entrusted to make very difficult decisions.”
As far as those tax hikes go, Clayton says there are some potentially on the horizon.
“We haven’t really seen that much on the gas side. We do have a number of electric utilities seeking rate increases including KC P&L, Ameren and Empire District Electric. That’s really where our time is going to be spent over the next three or four months,” Clayton said.
Clayton says right now, natural gas prices are at historic lows. But that may only last so long.
“There’s some areas that are very cheap, there’s some areas that are a little more expensive. It depends on where the gas comes from. If the gas comes from the Rocky Mountains it’s very cheap. If it comes from the Gulf of Mexico it’s a little more expensive,” Clayton said. “You know if it’s a cold winter prices are always going to be a little higher. There’s just no way around that because everyone wants to try to keep their house warm.”