The Missouri Legislature has adopted a bill that would change the way utility rates are set.
The legislation would allow private gas and water utilities regulated by the state Public Service Commission (PSC) to use a so-called “future test year” model for setting rates based on projected costs. It would also let private electric companies regulated by the PSC to seek rate increases for construction work in progress on new natural gas-generating plants.
The Missouri House passed Senate Bill 4 on Thursday. The legislation received bipartisan support and bipartisan opposition.
The arguments made in support of the bill centered around a need to give a substantial boost to the electric grid for reliability purposes. The arguments made against the bill centered around the impact it could have on customer utility bills.
Rep. Josh Hurlbert, R-Smithville, co-sponsored the proposal.
“Five years ago, our energy habits changed. We started to see rapid energy growth driven by the reshoring of advanced manufacturing, thanks to the policies of the first Trump administration, and later the CHIPS Act, and the need for data centers,” he said.
Rep. Brad Banderman, R-St. Clair, supports the proposal.
“Senate Bill Four is not a gamble with customers,” he said. “There will be an increase in long term utility rates. Senate Bill Four puts Missouri in the best position to keep our utility rates among some of the lowest in the nation.”
Rep. Don Mayhew, R-Crocker, had quite a bit to say about the bill.
“We’ve heard, heard a lot of gloom and doom over the last few days about what’s going to happen, you know, if we don’t pass this bill,” said Mayhew. “This reminds me a lot about bills that we’ve discussed in here: got to do it in a hurry; the world’s coming to an end. I’d like to remind the body that only 10 years ago, we were told that the by now, the ice caps would have melted.”
Mayhew said consumers will pay the price.
“A billion-dollar gas-fired plant. We’re talking about suddenly a company that has an enterprise value of $45 billion cannot afford to bond that project. Okay, so why don’t we just take it out of their profit? You know what they made last year? A billion dollars in profit,” said Mayhew. “I kind of figured that the investor-owns were going to save some money with this. They wouldn’t have a squadron full of folks wandering the halls up here trying to convince us to vote for this if there wasn’t a profit motive involved.”
Missouri utility companies are not allowed to disconnect a customer’s service for 24 hours after the temperature is expected to fall below 32 degrees or above 95 degrees. Under the bill, that time frame would be extended to 72 hours.
The bill’s fate is now up to the governor.
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