The non-profit group Consumer’s Council of Missouri thinks the legislative special session called by Governor Eric Greitens could be a vehicle to pass laws favorable to the utility industry.
Greitens has championed a proposal from a southeast Missouri lawmaker to allow for expansion of industrial plants in his impoverished district.
Representative Don Rone (R-Portageville) says his measure would help restore about 400 jobs at the former Noranda aluminum smelter site, and would help create 200 jobs at a new Bootheel steel mill. In order for those projects to move forward, utility rates from power provider Ameren would have to be reduced.
An economic development rate would have to be acquired through the Public Service Commission (PSC). But such arrangements don’t require any legislation to be passed. Attorney John Coffman of the Consumer’s Council notes one was negotiated for the Noranda plant itself in the past several years.
“It just wasn’t enough keep them from going out of business because of the way that China had been interfering in the market place for aluminum” said Coffman.
Coffman thinks the contention that the special session is meant to benefit the poverty stricken Bootheel region is a smokescreen for much more far reaching utility rate changes. “My concern is using this issue as a Trojan horse for a really big rate increase underneath it, and a rate increase that affect most of the state.”
Missouri House Democrats released an analysis Monday, stating that language in the “Rone amendment” went much further than adjusting rates to subsidize Bootheel aluminum and steel plants.
The statement said “in addition to more easily allowing the PSC to authorize special electrical rates for certain industries, (it) also allows the PSC to grant new mechanisms for rate recovery for investor owned utilities.”
In an interview with Missourinet, Governor Greitens would not address whether utilities such as Ameren would benefit from the Rone amendment, only saying it was a single issue proposal to stimulate job growth.
Coffman thinks the legislation in the special session will likely include key elements in Senate Bill 190, which would allow utilities to establish temporary rate hikes without oversight from the PSC. PSC Chairman Daniel Hall had stated he had concerns that some of the legislation introduced this year, and specifically Senate Bill 190, would put too many restrictions on the commission’s authority.
Coffman say the legislation in the special session is thought to be so consequential that Wall Street analysts are calling him to find out if it’s likely to pass.
“It’s clear from the activity on that end that this is something that could be a really big deal in the balance between ratepayers and shareholders. This could be a big shift away from consumers, ensuring more money in the pockets of utilities that they’re investing in.”
Warren Wood, Ameren Vice President of External Affairs and Communications, says the legislation in the special session simply offers the PSC new tools to enable the modernization of the power grid.
“These regulatory tools basically give the PSC some flexibility while maintaining its full authority to act in the interest of Missourians in the rate making process” said Wood. “So there’s nothing tying the commission’s hands at all. It gives them some new tools, and it gives them the authority to broadly accept or deny any proposal by any party, including utilities.”
Wood says Ameren supports language in the bill to allow for modernization of the power grid. “There’s a number of different benefits we see from accelerating the pace of smart grid investments, and from reducing the amount of older infrastructure we have in the field.”
Coffman, with Consumer’s Council, dismisses the argument being made by investor utility companies that Missouri needs to update its rate making system and follow 46 states which have already done so.
“Those 46 states that they’re talking about, there are all different kinds of issues. They’re just saying 46 states have changed their utility rate making law in the last few years. There’s really nothing about that group that relates to this legislation. It’s just this overall rhetoric about modernization.”
If legislation is passed strictly to subsidize discount rate to allow the Bootheel aluminum and steel plants to open up, Ameren customers statewide would see an increase in their utility bills.
If lawmakers pass a measure to strengthen utilities companies’ ability to boost rates independent of PSC oversight, the customers of Ameren, Kansas City Power and Light and Empire District Electric Company would likely see rate hikes.
Ameren’s Wood told Missourinet that, although he hadn’t seen the legislation in the special session, he did not think it included language to weaken PSC oversight.