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Poll: Oppose or Support Proposed Electric Utility Infrastructure Surcharge?

March 31, 2013 Politics/Policy, Sunday Poll 5 Comments

Most likely you’ve seen recent TV commercials talking about utility surcharges and regulations. These are sponsored by groups on opposite sides of Missouri Senate Bill 207 (link):

SCS/SB 207 – Currently, gas corporations may file a petition with the Public Service Commission for rate adjustments to recover costs incurred for infrastructure replacement projects. This act allows electrical corporations to follow a similar process to recover costs for infrastructure replacement projects. The types of costs that can be recovered include certain work on electric plants, certain capital projects undertaken to comply with environmental or safety regulations, and costs of facilities relocation due to public works projects.

This act details the process that an electric corporation and the Public Service Commission must follow in reviewing applications for infrastructure system replacement surcharges. If surcharges are approved by the Public Service Commission, this act requires electric corporations to submit to the Commission a reconciliation noting the differences between infrastructure system replacement revenues and appropriate pretax revenues. Additionally, this act modifies the amount of revenues that may be produced from an infrastructure system replacement from no less than one million dollars or half of 1% of the corporation’s base revenue and no more than 10% of the corporation’s base revenue. While the electric corporation is collecting an infrastructure system replacement surcharge, they may only adjust the rate two times every twelve months. If an electric corporation files a petition or change to an infrastructure system replacement surcharge, it shall not be considered an increase in the electric corporation’s base rate.

In other words:

The measure would let Missouri’s three investor-owned electric companies — Ameren Missouri, KCP&L and Empire District Electric — put the cost of replacing infrastructure on customer’s bills without first needing to get approval from the Public Service Commission. (St. Louis Business Journal)

Supportive viewpoint:

Under current law utility companies have to go through the Public Service Commission to increase rates to pay for infrastructure and other additional expenses. This process can take months. They said this bill fixes that regulatory lag and allows utility companies to invest faster while interest rates are low. Supporters said this will give the companies better credit ratings, which could make utilities cheaper in the long run and make infrastructure projects more attractive to investors. (KMOX)

Opposition viewpoint:

The Fair Energy Rate Action Fund, an opponent of the legislation, said the changes are not near enough to protect consumers. Executive Director Chris Roepe said the proposed expiration date is lengthy, the cap still would allow for significant costs and proving a case to get the refund would be difficult.

 “It’s still a really terrible bill for Missouri businesses and families,” Roepe said. (Southeast Missourian)

Who is the Fair Energy Rate Action Fund?

FERAF is a diverse coalition comprised by consumer protection groups. Members of FERAF include:

  • AARP
  • Missouri Association for Social Welfare
  • Consumers Council of Missouri
  • Missouri Association of Retailers
  • Ford Motor Company
  • Noranda Aluminum

The utilities have Missourians for a Balanced Energy Future with 19 co-chairs!

The poll this week seeks to find out how readers feel about this issue. The poll is on the right sidebar, mobile users need to switch to the desktop layout to vote in the poll.

— Steve Patterson


Currently there are "5 comments" on this Article:

  1. T-Leb says:

    Oppose, Ameren already made too much money last year. And since we can’t get that money back in Missouri, it argues that Ameren has enough money that it could be re-investing on infrastructure without a rate hike.

  2. samizdat says:

    “Under current law utility companies have to go through the Public
    Service Commission to increase rates to pay for infrastructure and other
    additional expenses. This process can take months. They said this bill
    fixes that regulatory lag and allows utility companies to invest faster
    while interest rates are low”.

    I would hope that Ameren’s planning for improvements takes longer than a few months. C’mon, UE, et al, these take years to plan, then the plans (I assume), need to be submitted to the proper Federal agencies, and then maybe you come back and try for rate increases. I would submit that this BS bill (which probably has ALEC, http://www.sourcewatch.org/index.php?title=ALEC_Corporations, and its fingerprints all over it; either that, or some other conservative ‘PRopaganda tank’) is nothing more than a backdoor attempt to put over the bill for any Callaway nuke improvements/expansion/upgrades onto the backs of the consumer, which currently holds the status of being against current MO statute. ‘Cos, yeah, that’s what we really want, amiright? Paying off a second nuke, after it–like the first one–goes over budget from ca. 700,000,000USD to about 3,000,000,000USD. Actually, I’ve seen estimates for nuclear plant designs coming in at well above 5,000,000,000USD, so 3,000,000,000USD would be almost pleasant by comparison. Ameren is backwards, and stuck in the 19th (coal), and 20th (nuke) centuries.

  3. moe says:

    I have no problem with Ameren making a reasonable profit. They and their shareholders are in the buisness to make a profit. Reasonable is the key word.
    I have no problem with an additional nuclear plant. Given our lack of wind delevopment and those against such, the slow solar development, nukes are much better than the coal plants. Do not kid youself in thinking that Callaway hasn’t been responsible for our very cheap rates in our area.
    The Public Service Commision at one time was a protector of the citizens. But under recent leadership (republican) they have been gutted to the point of being just a rubber stamp.
    Having said all that, I would oppose any additional rate increases for Ameren. They need to do better with what they have (just look to the recent investments put into clearing tree lines and such…..that was put off too many years and has caused so much damage),

    • backprop says:

      I agree with a lot of what you said, with one correction. The so-called “cheap” power rates have come from billions in dollars in taxpayer subsidy at every stage of the nuclear fuel cycle. The “cheap” rate you pay out of your front pocket is subsidized by the government grabbing nuclear subsidies from your back pocket. Not only did Ameren want to continue selling its “cheap” (for them to generate) nuclear power to us, subsidized by the government, but it also wanted ratepayers to pay them to make the investment upfront? Lose-lose-lose for everyone except Ameren.

  4. branwell1 says:

    Sounds to me like the “pro” position’s main point is that Ameren would maximize profits as quickly as possible without having to contend with pesky regulatory review, however much of a rubber stamp it might be…public hearings, media coverage, ugh…just give us the loot. In case that alone fails to inspire the struggling public, there is a vague reference to making “utilities cheaper in the long run”. Huh? Cheaper than what, exactly? Cheaper than it would be in their wildest, unfettered fantasies? Cheaper to Ameren? That does not necessarily mean cheaper to the consumers! I guess those of us who don’t like this can just use the other electric company, right? Oh, wait a minute…


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