The first annual Alberta Slavin Consumer Award will be presented to Lewis Mills, Public Counsel of the State of Missouri on Sunday, September 13th.
The award will be presented at the Consumer Council’s annual meeting and will be presented to Mr. Mills for his outstanding dedication to representing Missouri consumers and because of his courageous promotion of ethics reform at the Public Service Commission.
The event will be held at the Tarlton Corporation, 5500 West Park in St. Louis beginning at 4 p.m. Admission is $50 and refreshments will be served.
Sending the poor to pay utility bills at a payday lender is like sending the hungry for a meal in a shark tank.
It’s the worst kind of business synergy. Missouri utility regulators should halt the practice.
Payday lenders make a living off the poverty and lack of financial sophistication of their desperate customers. They charge very high interest rates — an average of 431 percent in Missouri; by law, they can charge as much as 1,950 percent — on short-term loans that often are secured by post-dated checks.
In some poor neighborhoods, those predatory lenders are the only local business where customers can make cash payments toward their electric and phone bills. Utility companies long ago eliminated most of the small neighborhood billing offices where they accepted payments from customers.
Most people today pay utility bills by check or credit card. But once, it was common to pay in person. Those who still do are disproportionately elderly, poor and living paycheck to paycheck without a checking or savings account.
As usual, it’s all about the money.
Utility companies say they got rid of their neighborhood billing offices as a cost savings measure. Re-establishing them would be costly. That expense would be passed on to utility customers, they say. And it could be significant.
AmerenUE’s service area, for example, covers 25,000 square miles of eastern and central Missouri — much of it rural.
Utilities contract with third-party providers, who set up a network of collection agents. Those providers make money by charging a “convenience fee” for each transaction.
The collection agents can include banks and grocery store courtesy counters. But those are in short supply in poor neighborhoods. There, the most prevalent financial institutions are predators like check-cashing businesses and payday lenders.
Customers, especially those with delinquent bills who face being disconnected, benefit from having convenient places to make payments. But they make easy marks for payday lenders whose high interest rates and easy renewal can leave them trapped until paying off the underlying balance becomes impossible.
The Missouri Public Service Commission, which regulates utilities, has been asked to change its rules so that payday lenders no longer could be used as collection agents.
That request came from the Office of Public Counsel, which represents ratepayers before the PSC. It builds on similar recommendations made nationally by consumer advocacy groups.
Utility regulators in Kansas and Arizona have been asked to issue similar rulings. A bill that would make it illegal for utilities to operate payment centers at payday lenders was introduced by state lawmakers in California.
The “convenience fee” is capped at $1 per transaction, and utilities don’t receive any part of it. But utility companies do collect fees of about $3 for credit and debit card payments by phone. There shouldn’t be an additional fee just to pay your utility bill.
The Missouri Public Counsel alleges that those fees are, in effect, an unapproved rate hike. Their impact is compounded because utilities have fattened their bottom lines by closing neighborhood centers where customers could pay their bills in person.
The Public Counsel is asking that utilities be required to keep a number of locations where customers could pay their bills.
Even if that’s impractical, the PSC should prohibit utilities from operating payment centers in payday lenders.
People living from paycheck to paycheck have enough financial worries without being sent to swim with loansharks.
Missouri Gov. Jay Nixon will soon, possibly as early as today, make one of his most important appointments since taking office in January: He will try, for the second time, to fill the fifth seat on the Missouri Public Service Commission.
The PSC regulates the state’s investor-owned utility companies; the new commissioner will have a key vote on such matters as AmerenUE’s request last week for an 18 percent rate increase. At stake in those hearings will be controversial provisions of a 2005 law that allows utilities to pass on environmental costs to customers without extensive PSC review.
The appointment is all the more critical because the commission currently is deadlocked 2-2 between those who generally side with utilities’ interests and those who are more attuned to consumers’ interests.
In 16 years as state attorney general, Mr. Nixon, a Democrat, built a strong pro-consumer record. But the PSC appointee must be confirmed by the Republican-controlled state Senate when the Legislature reconvenes in January.
In April, Mr. Nixon appointed Joseph Bindbeutel, a former aide who had been an assistant attorney general in charge of environmental issues, to the PSC seat. But the Senate, strongly pro-utility in recent years, let the nomination die when it adjourned in May.
Thus the PSC nomination has become a sort of minor-league version of the president’s Supreme Court nominations: The governor has to appoint someone who will please his own constituents but not antagonize pro-utility senators on the other side of the issue.
One key difference: Republicans also don’t want to antagonize big industrial electricity customers, whose executives often are major political contributors. Big corporations and small consumers often are on the same side in rate hearings.
A spokesman for the governor said Mr. Nixon will appoint a commissioner who has “no predetermined agenda” and who will have ample time to demonstrate his or her independence before the Senate reconvenes in January.
That should be about the time when AmerenUE’s rate hike request is making its way through the hearings process; a decision is due in June 2010.
The $402 million hike would be AmerenUE’s largest in 20 years, but its third in three years; just last January, the PSC approved an increase of $162.6 million. AmerenUE says its new request would raise monthly bills for the average household (one using about 1,100 kilowatt hours of power each month) by about $15.
Slightly more than half of the money would go to paying higher fuel costs, primarily for coal, and to offset lower returns on electricity sold outside AmerenUE’s service area. About $175 million would help pay for burying power lines and other improvements to ensure reliable service and to offset the higher cost of borrowed money.
The rate case will establish future procedures for allowing AmerenUE to pass along higher fuel and environmental costs without going through a full-blown rate case. A bill approved by the Legislature in 2005 allowed these pass-throughs; the current rate case is the only time the procedure is likely to get the full attention it deserves.
AmerenUE is entitled to a fair return. Whether 11.5 percent (the return the utility is seeking) for a monopoly operation is fair, given that the Legislature has removed a lot of the risk, deserves the active scrutiny of a full, and fully engaged, board of regulators.
The Consumer Federation of America has produced a video asking consumers to contact Congress in support of the Consumer Financial Protection Agency. The video can be viewed at:
In an age of paperless billing and online payments, it’s easy to see why many consumers don’t spend a lot of time skimming over their phone bills. Yet with some officials warning that “cramming” scams might be on the rise, it’s time to start scrutinizing those monthly statements.
According to the Federal Communications Commission, cramming is the practice of placing unauthorized, misleading or deceptive charges on your telephone bill. There’s nothing new to the scam, which exploded after federal regulators started encouraging what is known as third-party billing.
Ironically, Washington wanted to help consumers when it pushed third-party billing. The idea was that competition would flourish — and prices would drop accordingly — if local phone companies had to share space on their monthly statements with companies providing Internet service, voice mail and similar services.
Plenty of legitimate companies now bill customers via phone statements, but so do many scammers. Their MO is to keep the unauthorized, monthly fees low — usually less than $20 — with the hope that consumers never notice the charges. The bogus billing usually claims to be for voice mail, cell phone or Internet-related service; but some crammers have charged consumers for unwittingly participating in diet programs, sweepstakes and other services.
On Thursday, Illinois Attorney General Lisa Madigan settled a suit her office brought against a credit counseling company that allegedly bilked more than 9,000 Illinois consumers through bogus charges on their monthly phone bills.
US Credit Find of Cape Coral, Fla., has agreed to forgo deceptive practices, cancel all current billing contracts and refund Illinois consumers who say they never authorized the $9.99 monthly fees that bought access to an online tutorial designed to improve credit scores.
(Metro East readers, take note: To get paid, you have to file a complaint with Madigan’s office before Aug. 20. The fishy billing seemed most prevalent in the first 10 months of 2008, so dig out those old phone bills to see if you can make a claim.)
Obviously, this isn’t just an Illinois problem. In 2008, Missourians filed 1,961 complaints with the Missouri attorney general’s office about cramming and similar scams.
A Central West End woman said she recently took a close look at her phone bill to find out whether a change in service would make financial sense. Only then, she said, did she discover she had been paying for two separate voice mail services she had never authorized.
The woman, who did not want to be identified, said she called the company that was identified on her statement as the third-party biller. Someone at the firm told her that company was simply an agent of other firms and that she would have to call those companies directly. Needless to say, she got neither satisfaction nor straight answers. AT&T agreed to refund the bogus charges.
That’s not uncommon, said April Borlinghaus, a spokeswoman for AT&T. The phone company removes unauthorized, third-party charges and investigates companies “if we see a pattern of excessive cramming complaints,” she said.
“These companies are required by our contracts to submit only valid charges,” Borlinghaus said. “Violation of this obligation can result in a variety of remedies, up to and including termination of the billing and collection contracts.”
Getting a refund is just the first step. If your phone bill has been crammed, lots of regulators and consumers watchdogs would like to hear from you. You should file a complaint with the state attorney general’s consumer-protection division, as well as the FCC, the Federal Trade Commission and the Better Business Bureau.
To avoid getting ripped off, consumers always should review phone statements. The most suspicious charges might be small, but they add up month after month. Consumers can take other steps to avoid being ripped off in the first place.
— Avoid entering contests and always read the fine print. That’s where crammers sometimes bury authorization agreements.
— Beware free offers. A consumer might be instructed to call a toll-free number, say his name and declare something like “I want the service.” He’s agreeing to more than he realizes.
— Tell your phone company you want to pre-emptively block some services, like 1-900 dialing, international long distance, local toll calls and third-party services.
— Use up-to-date security software if you use a modem. Fraudsters sometimes use malicious software programs to download “dialer programs” to consumers’ computers. The program makes the modem dial international or 1-900 numbers.
When Tom Voss asked the Missouri Legislature for help to build another nuclear power plant, the AmerenUE chief executive promised high-paying jobs to help turn around Missouri’s moribund economy.
Pressed by lawmakers, however, Voss acknowledged that even with new legislation, the prospects of a multibillion-dollar nuclear plant — which could take a decade to build — were 25 percent at best.
Now that Ameren’s favored legislation has died, Voss is saying that the nuclear plant option is dead, too. Thursday morning, Voss said the company is suspending its efforts to build a second nuclear plant in Callaway County.
Proponents of the nuclear plant say Missouri missed a critical opportunity to meet its long-term energy needs with a source of power that is cleaner than facilities that burn coal or natural gas. Opponents say the proposed legislation would not adequately protect consumers from double-digit rate increases.
Voss said the legislative effort was about finding a cost-effective funding mechanism to the best power alternative available. “We developed a bill that we thought was the minimum we needed to provide financial certainty,” he said. “We are stepping away from the nuclear option at this time.”
Stepping away, however, is in the eye of the beholder.
“We’ll take that with a grain of salt,” said Kathleen Logan Smith of the St. Louis-based Missouri Coalition for the Environment.
Smith and other AmerenUE critics, including consumer lobbyist John Coffman, say the plant was already several years down the road, meaning there’s nothing to stop the utility from restarting its efforts. After all, Coffman noted, AmerenUE told lawmakers it would not make a decision on whether to build Callaway 2 until at least 2011.
“They’d still have two more sessions after this one to work on legislation,” said Coffman, the representative of AARP and Consumers Council of Missouri.
The plant was estimated to cost $6 billion to $9 billion and produce at least 3,000 union jobs during construction. AmerenUE pushed a bill that would have allowed it to charge consumers up front for certain costs of the new facility even before it was operating, saving millions of dollars in financing costs.
But critics say the proposal would have tilted the regulatory playing field in AmerenUE’s direction at the expense of consumers. “What I suspect is that they have a multiyear campaign to change how the Public Service Commission sets rates,” Coffman said. “They’re going to continue to hammer away at this legislation.”
In fact, AmerenUE is keeping the door open to nuclear power.
The investor-owned utility has not decided whether to pull its application for a nuclear permit with the Nuclear Regulatory Commission, spokeswoman Susan Gallagher said Thursday. That application, made in July 2008, is one of 17 pending before the NRC.
The nuclear construction industry has been largely dormant in the U.S. for about 20 years, and now several states are considering changes to laws similar to the bill that died in the Missouri Legislature. Florida, South Carolina and Georgia already passed such laws.
But some utility companies, including AmerenUE, are hoping to wait out the first set of projects and learn from whatever mistakes are made. Last month, AmerenUE executive Scott Bond told USA Today that the company did not want “to be in the first wave of plants.”
That point of view was heavily emphasized by critics who said the Legislature did not need to rush the proposal. Voss said the company would not seek new legislation next year.
At a news conference at an energy summit in Columbia, Mo., on Thursday morning, Gov. Jay Nixon criticized the company for not obtaining a nuclear permit before seeking a change in state law.
“I had hoped that everyone involved would have looked at this as a two-step process,” Nixon said, adding, “I don’t think Ameren has ever absorbed that point.”
At his news conference, Nixon announced a new plan to encourage energy conservation in state government. Both Voss and his critics agree on that theme: With the nuclear option off the table, conservation has to be a part of AmerenUE’s strategy.
Voss has maintained that without the second nuclear plant, the company would pursue new gas-fired power plants. They are cheaper to build because they are much smaller in scale, but the cost of natural gas fluctuates and is unpredictable, leading to potential rate spikes for consumers.
Missourians have among the lowest utility rates in the country, in part because of the state’s dependence on coal. But new Environmental Protection Agency regulations on carbon emissions make it unlikely any new coal plants will be built soon, and they might lead to price hikes to pay for pollution from existing plants.
That’s one reason why AmerenUE was pushing nuclear power.
“This was the least-cost option,” Voss said. “All the other options are more expensive.”
Some environmental groups, however, argue that AmerenUE is predicting unrealistic energy growth.
“If they’re serious about pursuing conservation and renewables, then we’re ready to talk,” said Smith of the environmental coalition. “Let’s find some real answers here.”
Missouri voters approved, by a2-to1 majority, a law that banned charging electric ratepayers for Construction Work in Progress (CWIP).
Now AmerenUElobbyists are pressing the Missouri General Assembly to overturn this voter-enacted, consumer protection. Why?Because AmerenUE plans to build a second nuclear reactor at their Callaway plant – and they are unable to lure private investors to take the risk of mistakes, delays, strikes, or material or labor shortages
The 1976 ballot initiative amended
Missouri law to ensure that electric ratepayers were not billed for costs of building a new or existing power plant until the plant was “fully operational and used for service.”This initiative overturned the Missouri Public Service
Commission’s (PSC’s) decision, in December 1975, to allow CWIP.
Utilities have historically sold stocks and bonds to private investors to pay for the construction of new power plants, and the finance charges for the use of this money were paid after the plant was producing electricity
The American Public Power Association stated: “[CWIP] abandons the traditional practice that the capital market furnish capital for the construction of new plants.Instead, the Commission desires consumers to supply money for the growth of a private business, and the consumer receives no financial return for a company’s use of his capital…The proposal removes incentive for utility management to curb costs.If a utility is guaranteed revenues for all costs incurred during construction, e.g. labor, equipment, property, engineering studies, etc., some incentive is removed for utility management to operate efficiently and be conscious of costs, because the consumer is supplying the capital, and the risk to management and to the investor is diminished.” (Comments filed with the Federal Power Commission, 4/15/75, pp. 12, 13)
It’s unfair.CWIP would allow electric utilities to charge current customers for future projects that are not yet providing any service.
It’s unnecessary.The Callaway I nuclear plant was built by Union Electric (AmerenUE’s predecessor), financed and audited before the large cost was phased-in for ratepayers. Customers then experienced no significant cost increases for two decades while Union Electric profited considerably (at times even setting earnings records).All this without the assistance of CWIP or any other ratepayer bailout.
It’s irresponsible.. If AmerenUE knows that the money to finance a project is going to be passed-through while it is being built, then the pressure to explore “least cost” options and manage efficiently is weakened. CWIP would force ratepayers to pay for projects before they are audited. When Callaway I was completed and thoroughly audited by the Missouri Public Service Commission (PSC), hundreds of millions of dollars were “disallowed” by the PSC as imprudent cost overruns
It’s a ripoff.Consumers already pay AmerenUE a high level of “profit”. This profit already compensates it for the risks of planning and financing their operations.If, in fact, UE prefers to have ratepayers bear all of its big risks, then their rate of return should be eliminated.
This electric monopoly is already allowed to charge rates that include a rate of return (with a return on equity higher than 10%).
It’s a bad precedent. Consumers should not be forced to “invest” in the utility’s projects – that is the job of shareholders.Consumers also should not be forced to be the utility’s “insurance company”, guaranteeing the utility’s risks.
Because the voters have debated this issue in the past and decided resoundingly to ban CWIP as an unfair ratemaking scheme, our elected officials should dismiss the utilities’ efforts to undo this important protection.You can help by asking your elected representatives to hold firm to the voters’ wishes, preventing a return to excessive Construction Work in Progress charges on our electric bills.
Industry lobbyists in Jefferson City won big-time this week when it came to fire safety equipment at nursing homes and investigations of insurance companies. Consumers weren’t so lucky.
Lobbyists persuaded members of a Missouri legislative panel to block rules requiring sprinklers and new fire safety standards for nursing homes.
Separately, the legislators then rejected pleas from a consumer group warning that buyers of auto and home insurance are losing key consumer protections.
At the center of this tale are the five senators and five representatives who are members of a powerful but obscure panel called the Joint Committee on Administrative Rules.
It’s known as JCAR and membership includes six Republicans and four Democrats.
No state rule can go into effect if JCAR objects. The committee can only reject rules, not enact them, and then only for specific reasons.
The idea, legislators say, is to keep bureaucrats from overzealously enforcing laws.
But critics believe industry lobbyists use JCAR to “veto” regulations behind the scenes that they couldn’t kill in public.
On Monday, the state Health Department brought JCAR regulations to improve fire safety standards at nursing homes, residential care and assisted living facilities.
State Fire Marshal Randy Cole says the new rules included three major improvements in safety standards not already required: sprinklers, fire alarms in smaller facilities and smoke stop partitions (safety walls between two parts of a building.)
Lobbyists for three influential groups representing nursing homes and assisted living facilities lodged numerous objections.
Kerri Hock, executive director of the Missouri Assisted Living Association, said the state demanded that facilities install commercial-grade smoke detectors and connected sprinklers in both rooms and hallways.
“The cost could be anywhere from $30,000 to $80,000″ per facility, she said. Her group represents half of the state’s 600 licensed residential care and assisted living facilities.
Legislators on JCAR voted 9-0 to reject the Health Department’s fire safety rules.
One member, Rep. Bryan Stevenson, R-Webb City, said he supports safety, “But it’s got to be cost-effective.” He called the proposed rules “so arbitrary and capricious that they created an undue burden.”
He said the Health Department will have to quickly come up with new rules; a 2007 state law requires new fire safety rules to be in place by the end of this year.
After rejecting the rules, JCAR then heard from Jay Angoff, a lawyer and former Missouri insurance commissioner. He spoke on behalf of the Consumers Council of Missouri, one of the state’s few consumer advocacy groups.
Angoff called for JCAR to reject proposed rules from the state Insurance Department for what are known as “market conduct examinations” of insurance companies. The old rules allow state investigators wide leeway to examine records of auto and home insurance companies to enforce consumer protection standards.
In a May press release, the Insurance Department said the new rules will “codify the success of market conduct reforms during Gov. Matt Blunt’s administration,” reforms that recovered more money for consumers.
But Angoff warns that the new rules require a company to agree to a state investigation.
The exams are the most important tool insurance investigators have.
State investigators traditionally use the exams to determine if an insurer is violating the law. The new regulations “appear to take the opposite approach” and require evidence of law violations before an investigation can proceed, Angoff says.
Some senior staffers in the market conduct examination division at the Insurance Department agreed. On June 12, they filed written objections warning that the new rules would bar them from investigating even immediate threats to consumers.
They also said insurance companies could use the new rules to endlessly delay investigations.
A lawyer for the Insurance Department said the staffers later withdrew their written request for what she described as “extreme changes” in the new rules.
At this week’s JCAR meeting, no legislator suggested rejecting the insurance rules. That means they will go into effect.
Sen. Joan Bray, D-University City, said she would have offered such a motion but it was clear there would be no support for it.
Sen. Luann Ridgeway, R-Smithville, JCAR’s chair, wouldn’t discuss the meeting.
So the legislators killed the fire safety rules fought by the nursing home industry and gave an OK to rules welcomed by the insurance industry.
“That’s correct,” Stevenson said. “The industry had a good day.”
AmerenUE ponders state law as it looks to add a nuke plantBy Jeffrey Tomich
ST. LOUIS POST-DISPATCH06/09/2008When Union Electric Co. pulled the plug on a second nuclear reactor in CallawayCounty in October 1982, few could have guessed that a new generation of executives would be back 25 years later with plans for another plant. But that’s exactly what’s happening.
The St. Louis-based utility, now called AmerenUE, and its partner, Baltimore-based UniStar Nuclear LLC, will seek a construction and operating license as soon as next month for a $6 billion, 1,600-megawatt plant next to the existing Callaway nuclear plant.
AmerenUE executives won’t decide whether to go forward with the project until 2010, but they want to make sure that everything is in place if they do. Among the items on their agenda: reversing a 1976 law that prohibits
Missouri utilities from charging customers for power plants while they’re being built.
Missouri voters approved a law to prohibit so-called construction work in progress — or CWIP — on Nov. 2, 1976, by a 2-1 ratio despite being massively outspent. The law was the product of a grass-roots endeavor by anti-nuclear activists to halt construction of the first Callaway plant.
The $3 billion plant was ultimately completed in 1984 despite years of delays and hundreds of millions of dollars in cost overruns. A second unit at Callaway was canceled — until now.
Even with an aggressive energy efficiency campaign and greater use of renewable resources, such as wind and solar, utility officials say they’ll need another baseload power plant — a large plant that runs 24 hours, seven days a week — by the end of the next decade to meet growing electricity demand. Right now, their technology of choice is nuclear.
Nuclear plants are cheaper to run than those that burn natural gas. And unlike coal-fired plants, they emit virtually no carbon dioxide — the greenhouse gas most closely linked with global warming.
Nuclear plants, however, cost more to build. AmerenUE estimates the price tag for a new unit at Callaway would be at least $6 billion. Add in financing costs, and the cost grows to $9 billion — roughly the same as the entire stock market value of Ameren Corp., the parent company of AmerenUE.
That’s too much to borrow, especially with jittery credit markets. So unless AmerenUE can pay for the plant as it goes — by charging customers during construction — it won’t get built, Chief Executive Thomas Voss said.
“We just couldn’t do it,” he said in an interview. “The risk would be too great. We don’t think people would lend us the money. We don’t think our board of directors would approve it. And we don’t think our stockholders would think it’s prudent.”
For anti-nuclear activists and some consumer advocates, CWIP remains a four-letter word. That’s especially true for Kay Drey of
University City, a campaign coordinator for Citizens for Reformed Electric Rates, the group that pushed the 1976 ballot initiative. She pledged to challenge any effort to undo her work of 30 years ago.
“If they try to get rid of CWIP, we’ll do it all over again,” said Drey, a fixture at Ameren’s annual meetings, peppering executives with questions about the Callaway plant. “I think the citizens should have a right to vote on that. I’m 75 years old, and I’m not looking for another statewide election fight, but I’ll do it.”
Another is John Coffman, an attorney for the Consumers Council of Missouri and the AARP, who is troubled by the prospect of allowing utilities to charge customers for a power plant before it’s built because it removes a powerful incentive to manage costs.
“If voters had not prohibited CWIP in 1976, we all would be paying several hundred million dollars a year more for Callaway 1,” Coffman said. “And if they succeed in repealing the will of the voters, we will all be paying hundreds of millions of dollars more,” for a second Callaway plant.
The last of the nation’s 104 nuclear plants was completed more than 20 years ago, so even the best cost estimates are less than certain. One thing is clear, though: Costs for all types of power plants are rising sharply in sympathy with prices for building materials such as concrete, steel and copper. A shortage of skilled labor has boosted costs as well.
Last month, energy consultancy Cambridge Energy Research Associates, based in
Cambridge, Mass., reported that a power plant that cost $1 billion in 2000 costs $2.31 billion today. The first Callaway plant, completed in 1984, cost $3 billion.
“The fundamentals that have driven costs upward for the past eight years — supply constraints, increasing wages and rising materials costs — remain in place and will continue during 2008,” Candida Scott of Cambridge Energy said in the report.
Moody’s Investors Service estimated in a recent report that a new nuclear plant could cost more than $7,000 per kilowatt of capacity. If correct, the cost of a plant as large as the one being proposed by Ameren would balloon to more than $11 billion.
AmerenUE executives know the cost pressures facing the industry and consumers. They also know that raising electric rates is never popular. But they insist that reversing the anti-CWIP law would benefit customers in the long run.
Doing so could save $3 billion in borrowing costs and prevent the kind of rate shock that threw
Illinois into chaos last year after electric bills skyrocketed, Voss said.
Jeff Davis, chairman of the Missouri Public Service Commission, agrees. He said changing the law could benefit consumers if drafted properly.
“If you pay cash, you’re going to get a better price than if you put it on a credit card,” he said.
The PSC chairman said he would support legislation to do so only if it included adequate consumer protections and preserved the commission’s authority to disallow costs.
The issue isn’t exclusive to
Missouri. South Carolina‘s legislature last year approved a bill to allow utilities to charge customers for a new nuclear plant while it’s being built. On May 31, electric utility SCE&G filed to raise rates beginning next year for its stake in two new reactors that won’t begin producing electricity until 2016.
AmerenUE officials have met with some legislators and found support for reversing the
Missouri law banning charges for construction work in progress, Voss said. The utility, however, realizes that November elections will change the makeup of the Legislature, and the state will have a new governor next year.
“I don’t know if we’ll get something passed next session, but we’d certainly want to get a feel for the Legislature,” Voss said.
Part of AmerenUE’s appeal to lawmakers is jobs, Voss said. The plant, in the heart of the state, would be the biggest construction project in
Missouri‘s history, generating as many as 3,000 temporary construction jobs and 500 permanent jobs.
“It’s a huge economic boon in a state that could use it,” he said.
If AmerenUE is unable to build a new nuclear reactor, the utility probably will build more natural gas-fired generating capacity in
Illinois to supply Missouri customers. That means Missouri would lose the jobs and economic benefit of a multibillion-dollar project and rates could climb even more than they would if a nuclear plant is built, Voss said. Retail electric rates in states such as California and New York, which rely mostly on natural gas, are twice as high as Missouri’s, according to December 2007 data from the Energy Department.
AmerenUE also could look to sell the Callaway site to an out-of-state power company, such as Baltimore-based Constellation Energy Group, a partner through the UniStar venture.
“If
Missouri doesn’t want us to build it as a regulated utility, somebody could build it as an unregulated plant,” Voss said.
