Action to reduce the electrical costs for a major user has grown from a rate-setting issue to an economic development decision.
As such, it now becomes a decision for the state Legislature, not the Missouri Public Service Commission (PSC) or Gov. Jay Nixon.
The user is Noranda Aluminum Co., which operates a smelter - a process that requires massive amounts of electricity, which is provided to them by Ameren Missouri.
Noranda now enjoys a reduced electrical rate from Ameren - the lowest of any rate an Ameren customer pays. We have have no quarrel with that; negotiating reduced rates for consistent, bulk customers is a standard business procedure.
Noranda, however, is not satisfied and has sought further reductions, claiming it will reduce operations and employees if lower rates are not forthcoming.
Earlier this month, Nixon signaled his support for a compromise reduction. "Noranda announced plans to reduce its workforce and put $75 million in capital projects on hold" after the PSC rejected Noranda's reduced-rate request last summer, Nixon said, citing his economic development concerns.
Lawmakers responded with a range of objections, including:
• Sen. Mike Kehoe, R-Jefferson City, said the governor was interfering with the PSC process "on behalf of one special interest category."
• Sen. Jeanie Riddle, R-Mokane - in a letter co-authored by Kehoe and Senate Majority Leader Ron Richard, R-Joplin, and three other senators - wrote" "That decrease would be transferred to all other customers of Ameren Missouri who would pay more so that Noranda could pay less."
• Rep. Genise Montecillo, D-St. Louis, said "this rate shift is unfair to my constituents, many of whom are on a fixed monthly income."
The fairness and equity concerns advanced by legislators are sound, but more compelling is the argument that, by linking rates to jobs, Noranda has elevated the issue to an economic development matter.
Like other business incentives and issues - from tax breaks to bailouts - authorized by the state, this matter now deserves to be debated and decided by Missouri lawmakers.