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New Utility Surcharge in Missouri?

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JEFFERSON CITY, Mo. (AP) - Missouri electric companies could levy a surcharge for expenses such as utility poles and cyber-security investments under a legislative proposal that supporters contend would help modernize the state’s power infrastructure.

Legislation filed this past week in the Senate would let electric utilities seek an infrastructure system replacement surcharge for several types of projects. Sponsoring Sen. Mike Kehoe said it would remove unnecessary regulatory barriers, help power companies make investments to improve reliability and lead to jobs and economic development opportunities. He said consumers would save money over time through increased reliability and efficiency.

“Consumers, businesses and state regulators expect and demand reliable energy delivery. Missouri’s economic future depends on it,” said Kehoe, R-Jefferson City.

But consumer advocates are critical and contend it would unwind the regulatory process.

The Fair Energy Rate Action Fund said the legislation would make raising electric rates easier.

“The impact on the pocketbooks of Missouri families and businesses cannot be ignored,” said Chris Roepe, executive director for the Fair Energy Rate Action Fund. “The last thing Missourians need is for the Legislature to allow another surcharge to be added to their electric bill.”

Missouri legislators passed a 2003 law allowing gas and water utilities to request an infrastructure surcharge, which state regulators must act upon within 120 days. Continuing a surcharge after three years requires a rate case, which is more involved and lengthier.

The Senate legislation would let electric companies also seek an infrastructure surcharge. It is backed by the Missouri Electric Alliance, a collaboration of St. Louis-based Ameren Missouri, Kansas City Power & Light and The Empire District Electric in Joplin.

A spokesman for the electric alliance said the legislation would allow power companies to re-invest more quickly in infrastructure upgrades that immediately create jobs. The alliance said common infrastructure costs now accumulate into a larger and more complex rate case, and the legislation would allow expenses to be reviewed sooner by regulators. Costs that could be recouped through an infrastructure surcharge would be capped and there would be oversight and approval by utility regulators.

State Public Counsel Lewis Mills, who represents ratepayers before the Public Service Commission, said the legislation would make significant changes. He said the infrastructure surcharge for gas companies came as they were facing difficulties in replacing aging gas mains. He said there is not the same safety impetus in this case.

“You don’t want electric lines falling down everywhere, but that’s not a kind of chronic condition like the deteriorating gas mains were,” he said.

The Senate legislation has support from 16 other senators, including five Democrats and the top two Republican leaders.

Energy issues have gained attention in the Missouri Legislature in recent years. And in November, the U.S. Department of Energy passed the state over for a grant for a plan developed by Ameren Missouri and Westinghouse to develop small modular nuclear reactors in central Missouri. The federal agency has said it plans to issue a “follow-on solicitation” seeking further modular reactor projects.

Allowing the infrastructure charge for electric companies could improve Missouri’s position, supporters of the legislation say.

Irl Scissors, executive director of Missourians for a Balanced Energy Future, said new energy technology requires newer transmission lines.

“The state needs to upgrade its infrastructure,” Scissors said. “I think the electric consumer wants to see upgraded power lines and power sources in Missouri, and this is a way that the electric utilities can focus on doing that.”

© Copyright 2013 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed.

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