JEFFERSON CITY / April 21, 2017 – For the first time in recalled history, the Public Service Commission (PSC) has reduced their ethical standards. As the regulatory body over monopoly investor-owned utilities in our state, the PCS has been increasing transparency and good governance standards since the 1970’s but with a new rule issued this week, we have taken an enormous step backwards.

In order to facilitate transparency and maintain public trust and confidence in the Commission’s integrity and impartiality, the Commission previously adopted rules regarding off-the-record communications between commissioners and utility executives and their lobbyists. These rules require notice and public disclosure of what the commission is doing on the public’s behalf. It is common-sense policy.

The PCS recently approved a new rule that undoes that work and eviscerates their code of ethics. The new rule removes disclosure and notice requirements and eliminates the requirement for public representation by the Office of Public Council. What this rule effectively does is allow the commissioners to meet in private with utilities with no meaningful public oversight.

This controversial measure was not a slam dunk at the Commission. Two of its five members voted against it. Both Steve Stoll and Bill Kenney voted to preserve the current ethical standards. Consumer advocates such as Consumers Council of Missouri are lauding these two commissioners for standing up for transparency and consumer interests in the Capital, not a popular stance in Jeff City these days.

In fact, utilities appear to be colluding with the legislature to increase costs through numerous bills before both the House and Senate. With over 100 utility lobbyists registered with the Missouri Ethics Commission on behalf of utilities, they may very well have their way.

Senate Bill 190 is being pushed hard by Ameren and other electric companies. This sweeping legislation would make numerous changes to the current ratemaking system, causing rates to rise faster and increase higher for the same level of service, costing Missourians hundreds of millions. To make matters worse, this legislation includes lower rate for one company: Doe Run, subsidizing their rates by rate increases on ordinary households.

Senate Bill 184 threatens to guarantee water company profits regardless changes in usage. This legislation would allow water companies to automatically increase water rates annually to cover losses from decreased consumer usage that could result from abnormal weather, an economic downturn, or other disaster. Ratepayers would essentially have to guarantee profits, shielding a for-profit company from decreased profits.

As our legislature ponders massive cuts to senior tax breaks and considers an end to nursing home and in-home care services for more than 20,000 Missourians with disabilities to balance the state’s budget, now is not the time for legislators to be wasting precious time figuring out how to increase utility profits at the expense of all Missourians.

Thank the commissioners who stood up for transparency in utility regulation:
Steve Stoll: 573-751-4221
Bill Kenney: 573-751-7508

JEFFERSON CITY — Never have household checkbooks had so much to fear from Jefferson City politicians. Since Missouri elected a new governor and several new legislators this past November, utility lobbyists have been drafting up new schemes to squeeze ever more dollars from unsuspecting utility consumers. Over 100 utility lobbyists have registered with the Missouri Ethics Commission, including many former legislators, as well as former Public Service Commission (PSC) commissioners.

It is not news is that utility companies are trying to find ways to bypass the PSC and pass rate increases through surcharges and other complicated mechanisms—such proposals are an every year event. What is new this year is the increasing number of proposals and the increasingly frantic pressure being applied by utility lobbyists and affiliated organizations for a “fix” to the PSC process with absolutely no evidence of a problem.

Missouri lawmakers have been generally cautious in the past about these repeated attempts to shift the business risk of monopolies onto the backs of captive ratepayers. Few of those proposals in the past ever became law. Missouri has thankfully avoided many of the legislative mistakes bordering states made in adopting utility proposals to change their rate-setting laws, adding such methods as Construction-Work-In-Progress and Formula Rates. Those states are now left debating bailouts for big power plants that are having trouble surviving the current energy marketplace, or forcing ratepayers to pay for other bad utility investments.

What has does that mean for Missouri? On average, Missouri electric rates are currently among the lowest in the Midwest. This is an incredible benefit for our state economy. But this could be wiped away entirely by legislation currently pending in the State Legislature.

So what needs to be fixed: profits? The biggest monopolies here in Missouri–Ameren Missouri, KCPL, Laclede Gas (Spire), and Missouri-American Water Company—have been making very generous profits, enjoying increasing dividends, as well as soaring stocks prices.

Reliability? Both Ameren Missouri and KCPL currently have the some of the highest electric reliability data in the Midwest. Low rates, high reliability, and profitable utilities. What is wrong with this picture that needs to be “fixed”?

Nonetheless, more than a dozen pending measures that would increase regulated utility rates have already passed out of utility-friendly committees so far this 2017 legislative session. Here are just some of the pending proposals that have the potential to add up to significant sums of money on top of current household utility bills:

Electric Ratemaking Legislation Rewrite
Senate Bill 190 – (Sen. Ed Emery and Sen. Jamilah Nasheed); House Bill 628– (Rep. Rocky Miller). This sweeping legislation would make numerous changes to the current ratemaking system, causing rates to rise faster and increase higher for the same level of service, costing Missourians hundreds of millions. To make matters worse, this legislation includes lower rate for one company: Doe Run, subsidizing their rates by rate increases on ordinary households.

Water Utility Decoupling Profits from Usage
Senate Bill 184 – (Sen Ed Emery); House Bill 243 (Rep. Charlie Davis).This legislation would allow water companies to automatically increase water rates annually to cover losses from decreased consumer usage that could result from abnormal weather, an economic downturn, or other disaster. Ratepayers would essentially have to guarantee profits, shielding a for-profit company from decreased profits.

Other legislation that would raise utility rates include formula rate bills for Natural Gas Companies: SB 242 – (Sen Ed Emery) and House Bill 747 (Rep. Rocky Miller); Performance Based Rates creating automatic, allowing for 5-year pre-approval plans for electric companies SB 214 – (Sen. Ed Emery); and a New Surcharge Authorization bill, that would open the door to unlimited new surcharges HB 997 — (Rep. Rocky Miller).

But consumers have some hope. A few legislators have been bravely standing up for consumers. “Sen. Gary Romine, Sen. Doug Libla, and Sen. Jill Schupp represent a few brave voices speaking up against a torrent of utility propaganda.” says John Coffman, utility counsel for Consumers Council of Missouri.

“It’s Not the Grid; It’s the Greed” has been the rallying cry of this legislative bulwark against numerous utility rip-off schemes. Unfortunately, many more state legislators are working with the utilities to make changes that would raise utility rates.[1] Meanwhile, Missouri has too many other serious problems for our State Legislature to waste precious time figuring out how to increase utility profits.”

This Annual Report represents a summary of CCM’s activities for 2015.

In 2013, Consumers Council had a very busy year – with several notable successes — in our efforts to protect the interests of individual consumers.