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Verbal battle continues over utility surcharge

The public relations battle appears to be heating up again, even though Missouri lawmakers have yet to debate proposed laws that would let the state’s three regulated electricity providers add a surcharge to customers’ bills for some work on their infrastructure.

Sen. Mike Kehoe, R-Jefferson City, and Rep. Jeanie Riddle, R-Mokane, have sponsored separate, but similar bills that would let the utilities — St. Louis-based Ameren Missouri, Kansas City-based KCP&L and Joplin-based Empire District Electric Co. — start work on some projects and add the costs of that work as a surcharge, known as an ISRS, on customers’ bills until the Public Service Commission has a formal rate case.

In a Thursday news release, the Fair Energy Rate Action Fund (FERAF) said the utilities supporting the bills “admitted” — during Wednesday’s House Utilities Committee hearing on Riddle’s bill — that the proposed legislation “does not allow the Missouri Public Service Commission to determine if a project is prudent before the new surcharge fee goes on Missourians’ bills.”

That release said Ameren Missouri CEO Warner Baxter told the House committee Wednesday morning that the PSC would not decide if a repair project was “prudent” when the company first said it wanted to charge consumers for a project.

“They would do that as part of the normal rate case,” Baxter told the committee, according to a transcript provided by FERAF.

FERAF has said from the beginning of its opposition to the proposed law that the PSC can’t stop the work, or the surcharges, before they begin — and that, by the time the commission does a full rate case on the utility, it will be much harder to reject the costs already billed to customers.

But the proposed law’s supporters say FERAF simply isn’t reading the bills correctly.

FERAF is a group representing consumer groups, including the AARP, Consumers Council of Missouri and the Missouri Association for Social Welfare, and utility users, including the Missouri Retailers Association, Ford Motor Co. and Noranda Aluminum.

They want Missouri consumers to tell lawmakers to block the bills, arguing they “allow energy companies to dig even deeper in our pockets to charge more money for the same service.”

The proposed law is based on existing state laws giving surcharge authority to the state’s regulated gas and water companies, for repairs to their infrastructure — primarily for the sometimes century-old pipes used to distribute the gas and water to customers.

That law — and the one proposed for electric companies — details the kind of work that qualifies for the surcharge, and requires a utility to inform the PSC before work begins.

The commission has several months to review the request before authorizing a surcharge.

“I am not aware of an ISRS being completely denied” under the current gas and water companies law, PSC spokesman Kevin Kelly said Thursday, in an e-mail. “When a filing is made, the PSC staff thoroughly reviews the filing to ensure that the costs are consistent with the ISRS statutes and that the calculation is correct.

“The Staff then makes a recommendation to the Commission.”

Both Kehoe and Scott Charton, a spokesman for the electric utilities’ Missouri Energy Alliance group, said the proposed law clearly allows the PSC to reject a request — even if it hasn’t done so during the 10 years the gas and water law has been on the books.

“The existing law includes clear requirements for what must be included in the filing for review and approval by the PSC,” Charton noted. “Failure to follow these requirements could result in a filing being rejected.”

Both Charton and Adam Gresham, Kehoe’s legislative assistant, noted the PSC has “modified” requests at the beginning of the process, under the gas and water ISRS law.

Charton said: “ISRS would provide greater oversight and transparency on costs associated with upgrading our infrastructure. ... Under the current process these costs are reviewed only during the rate case, not in the short term.

“In other words, there will be more oversight (under the proposed law), not less.”

The House committee took no action Wednesday, after hearing testimony on Riddle’s bill.

The Senate’s Commerce, Consumer Protection, Energy and the Environment Committee last week recommended full Senate debate on Kehoe’s bill.

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