Changes proposed to utility measure
Tuesday, March 12, 2013
Legislation that would allow Missouri power companies to ask for an infrastructure surcharge has been revised to reduce the cap on charges, require customer bills to be credited for improper costs and add an expiration date for the measure.
A copy of the revised bill was provided to The Associated Press on Monday by the office of the legislator sponsoring the bill, in advance of it being debated by the full Senate. The utility legislation is listed second on the Senate’s debate calendar, though the Senate majority leader said Monday that he would not bring it up until after lawmakers return from their spring break on March 25.
The utility legislation has received significant attention at the Capitol. It would let electric utilities seek a surcharge to help pay for infrastructure work between requests to the Public Service Commission to increase rates. In addition, power companies would have to track operation and maintenance costs.
The Missouri Electric Alliance, a coalition of investor-owned power companies formed to push for the legislation, said the bill started with strong consumer protections and now would be even better for electric customers. Scott Charton, a spokesman for the coalition that includes St. Louis-based Ameren Missouri, Kansas City Power & Light and The Empire District in Joplin, said the legislation would update Missouri’s dated utility regulations.
“The latest version is another positive step toward enabling more timely reinvestment by electric companies in strengthening Missouri’s power infrastructure while creating good jobs and protecting consumers,” Charton said.
But 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.
Under the revised legislation, the infrastructure surcharge and expense tracker would expire in August 2033 unless they are renewed by the Legislature. The cap on how much could be collected through the surcharge would be reduced to 8 percent from 10 percent of the power company’s base revenue.
The legislation also would track costs for operations and maintenance for utilities’ next request to increase rates. The tracker would be used to compare the difference between the costs factored into electric rates and the expenses the power company actually incurs. The differences would be included in the calculation for electric rates when the utility files its next request to raise rates, but the increase suggested through the tracker would be limited under the new version.
In addition, the proposal would change the handling of improper costs that already had been included in the surcharge. If the Public Service Commission disallowed costs, power companies would credit their customers’ electric bills with interest. Previously, utilities would have made up the difference by reducing the future infrastructure surcharge.
Sen. Mike Kehoe, R-Jefferson City, said he likely had enough votes to pass the legislation as it originally was proposed but wanted to work to bring people together. He said the changes “help just give it a little bit more strength and bring a few more people on board to let them know that I’m listening.”
The utility legislation would allow a surcharge for improvements that replace, add or extend the life of infrastructure already in service. It could apply to property involved with generation, transmission, distribution, sale or furnishing of electricity but not administrative office buildings or newly built or acquired generating plants.
It also could be used for projects needed to comply with government environmental and safety rules.
Regulators would have 150 days to review infrastructure surcharge proposal instead of the 11 months allowed on requests to increase rates. Power companies could seek a surcharge no more than twice every 12 months and would need to have filed for a rate increase within the past three years.
The House Utilities Committee could vote on its version of the legislation this week.
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