Now it wants to get in your pocket again!

Senate Bill 207 and House Bill 398, virtually identical bills, are working their way through the legislative process in the Missouri General Assembly.  The bills would let investor-owned utilities raise rates automatically — through a mechanism called an Infrastructure System Replacement Surcharge — without any meaningful review by the Public Service Commission.  These utilities are Ameren Missouri, KCP&L, KCP&L GMO and Empire District.

The bills gut Missouri’s rational general rate-making process that has given consumers at least a fighting chance against the utilities for many decades.

Over the past five years Ameren was allowed to raise its rates $1.1 billion — 43 percent.  That cost consumers $2.8 billion more, just when they were trying to make ends meet during the economic downturn that devastated many families.

No other state allows anything like this broadly defined surcharge.  It will drive up the cost of doing business in Missouri and could cause businesses to leave.

To read the bills, go to Senate.MO.Gov or House.MO.Gov.

St. Louis Public Radio has launched a new project that will keep track monthly of gifts and money lobbyists give to Missouri legislators.  Its first report tracks expenditures in the first two months of 2013.  In January and February Ameren Corp., provider of electricity and gas to a large portion of the state, topped the list with expenditures of more than $25,000.

KWMU, University of Missouri – St. Louis, April 10, 2013

St. Louis Public Radio has launched a new data-oriented project that will be keeping track of all the money Missouri legislators receive from lobbyists.

In just two months this year, Missouri legislators and statewide officials received more than a third of a million dollars in gifts from lobbyists. Expensive meals, basketball tickets and clothes are all common gifts to the people that craft our laws and govern us.

Probably none of this is surprising to you. It’s fairly understood that lobbyists spend a lot of money on public officials. But there hasn’t been an easy way to break down that large, and often foreign-seeming $338,396  that lobbyists spent on politicians.

That’s why St. Louis Public Radio is starting a new project to keep track of that money, and hopefully answer the questions of who’s giving it, who’s receiving it, and what it’s going toward.

St. Louis Public Radio Report on Lobbyist Spending

Fair Energy Rate Action Fund, March 11, 2013

Businesses, just like politicians, need to be held accountable to the public when making public policy. Ameren, Empire and KCP&L’s recent explanation for why they need to abolish the PSC’s oversight of new expenditures and add a surcharge to the electric bill of every Missouri business and residential customer is a case in point.

The ISRS legislation was pitched to legislators as allowing electric companies to be able to collect a surcharge from customers to replace outdated and unreliable infrastructure, just like water and gas companies are able to do on a limited basis. If only it were true.

Unfortunately some extremely controversial and costly provisions were included in the legislation that are nothing like how water and gas companies are permitted to operate. This fact has left many legislators scratching their heads and hitting reverse.

These false claims include:

• Changing the definition of what an ISRS is all-together, unlike the more restrictive uses for water and gas companies. In fact it will cost customers an additional $14 million for every $100 million the utility spends through the ISRS. This additional $14 million per $100 million spent provides no benefit to customers other than opening up their pocketbook sooner and wider for the utility company.
• Slipping in an expensive cost overrun tracker that puts into law a disincentive for utilities to operate efficiently and keep their spending in check. The utilities can rack up overrun costs on this newly proposed ratepayer credit card. Had this provision been in effect over the past several years it would have cost Missourians an additional $200 million on top of the $5.7 BILLION in rate increases paid during this time. Missouri businesses and residents would have received the same exact service, but been forced to pay over $200 million more for absolutely nothing in return.
• Allowing the electric utilities to build brand new generation facilities through a new surcharge without going through the traditional ratemaking process that includes a prudency review and full revenue versus cost review by the Public Service Commission. The capital expenses allowed as part of this proposed surcharge are a monumental $3.4 BILLION over a three year period. To put this in perspective, under the electric ISRS, utility companies could spend more money than it cost to build Callaway I or Iatan II. By comparison, water companies can only spend $125 million every three years.
• Claiming that Ameren’s bond rating is so low it isn’t able to borrow money at the cheapest rates possible. The only problem with this talking point is that Ameren Missouri, funded by Missouri customers only, is one of the healthiest utility companies in the country with an A3 bond rating, which is a strong investment grade according to Moody’s. Ameren’s corporate bond rating is poor because its other two units, Ameren Illinois and Ameren Generating Company, have experienced huge losses in the open market lately. It frankly should not be the Missouri legislature’s job to bail out the poor business practices of Ameren Illinois and Ameren Generating Company.
• Utilities have argued that this won’t lead to higher electric bills for Missouri families and businesses. By its very definition a surcharge adds costs to consumers. That’s why in a recent poll by Public Opinion Strategies, 71% of Missourians opposed this legislation, with 77% of Missourians less likely to support a candidate for office in Missouri that favored this legislation.

Proponents of this legislation also continue to talk about the jobs that would be created, even though the opposite is actually true. A study released last week, by a firm that has done work recently for Ameren, showed if electric rates were increased by 10%, as the electric ISRS allows, Missouri would lose 60,000 jobs. All of the hard work that has been done in recent years by legislators to make Missouri a more business friendly state might as well be thrown out the window if this legislation passes.

The first question these utility companies need to answer is why they proposed legislation that says one thing but they claim does another. These monopolies need to be accountable and prove they can be trusted with more of Missourians’ hard earned money.

Missouri Times, March 26, 2013

JEFFERSON CITY, Mo. – A contentious Public Service Commission meeting ended in consensus on Wednesday with the PSC voting unanimously to allow the expedited request of Sen. Eric Schmitt, R-Glendale, to provide the Senate more information on the pending “ISRS” legislation in the form of a formal docket and have the information returned to Senator Schmitt as soon as possible.

Schmitt was pleased by this affirmation by the commission’s decision to review the legislation that would allow investor owned utilities to charge customers a surcharge in order to pay for previously completed infrastructure projects.

“I am pleased the PSC has kept the docket open and will allow a full review of the facts, SB207 and its impact on our constituents,” Schmitt said. “Allowing this process to move forward will aid in general assembly’s deliberation on this very important matter.”

While supporting keeping the docket open, the PSC did amend their prior plans for a full inquiry that would include a hearing and a discovery phase. Their decision came after Senate President Pro Tem Tom Dempsey and Sen. Brad Lager, chairman of the Commerce, Consumer Protection, Energy and the Environment Committee, penned a letter urging them to cancel the hearing.

Dempsey told The Missouri Times that he was fine with receiving technical advice from the PSC on a bill.  But, the decision to hold a hearing under Section 386.380.2 RSMo should be discussed by the whole Senate or House, or perhaps requested by the President Pro Tem or Speaker of the House acting in their capacity as presiding officers of their respective chambers.

Lager also expressed support for the way in which the PSC handled the matter.

“I think they did a wise thing by canceling the hearing. They should respond to senators questions, and I comfortable with how they handled the situation,” he said.

In a previous scenario, Lager and Dempsey sent a letter asking for the PSC to increase their involvement in a utility matter. However, Lager pointed out that the circumstances were very different from then and now.

“The previous letter I sent to the PSC was meant to ask for technical information and was to be provided while the legislature was not in session,” he said.

The PSC reached consensus on allowing the docket to remain open after nearly an hour of contentious debate. Chairman Robert Kenney aggressively advocated for a full, open docket that would include a hearing and a discovery phase. Commissioner Terry Jarrett led the fight for as narrow an inquiry as possible while repeatedly saying he was for transparency, just not for a larger inquiry on this issue.

Commissioner Terry Jarrett argued that opening this docket had brought the PSC into the ISRS debate, which was met by a lengthy rebuttal by Chairman Kenney, who carefully referenced many past instances where the PSC had already been involved in the ISRS issue.

“The public docket would just be a framework for the PSC to do what we were already doing only on the record and in public instead of the way we were doing it,” Kenney said.

Commissioner Bill Kenney suggested that the request for further PSC involvement was a strategic move by opponents of the ISRS legislation to use the PSC as a pawn to delay debate and make passage less likely.

Lager said he agreed with Kenney’s view: “I believe invoking the PSC here was meant as a stalling tactic, and I believe it was very effective. I would speculate at this point the ISRS legislation has less than a 25 percent chance of passing.”

However, Schmitt specifically requested an expedited request, and The Missouri Times has confirmed a letter was signed by five Senators — Dan Brown, Doug Libla, Wayne Wallingford, Mike Parson, and Gary Romine — asking Dempsey to wait to begin debate on SB207 until the PSC has issued their expedited reply to Schmitt.

Jarrett argued several times after it was clear Schmitt’s request for more input would be granted to send that reply as soon as possible.

“I want to see it sent as soon after comments close on April 1as possible,” he said. With the legislature on break for Easter, the earliest the PSC response is likely to arrive when the Senate is in session would be on April 8.

While Lager may be pessimistic about the chances of passing the legislation, the war between both sides raged on. After the PSC meeting, Irl L. Scissors, executive director of Missourians for a Balanced Energy Future, sent out a statement.

“Throughout the legislative process, MBEF has worked with lawmakers from across the political spectrum and from every corner of the state, as well as with the Executive branch,” he said. “We will continue to provide information and answer questions about this important legislation that will keep moving Missouri forward by modernizing regulations, enabling investment in infrastructure and creating thousands of jobs in Missouri.”

Chris Roepe, a spokesman for the Fair Energy Rate Action Fund, responded: “The fact that Missouri utility companies continue to refuse to provide information and oppose a full investigation, public hearing and full exposure of this new surcharge legislation should tell Missourians all they need to know about what this new law will do to their electric bill.”

Missouri Times, March 28, 2013

JEFFERSON CITY, Mo. – On the heels of a contentious Public Service Commission hearing Wednesday where the Commission unanimously decided to keep open a docket requested by Sen. Eric Schmitt, R-Glendale, to collect more information, two sitting senators have accused former PSC Chairman Kevin Gunn of lobbying them to support the pending “ISRS” bill.

At the meeting, Commissioner Terry Jarrett argued that opening the docket to collect information on SB207 had brought the PSC into the ISRS debate. Chairman Robert Kenney said he strongly disagreed.  He referenced many instances in which the PSC had already been involved regarding the ISRS issue in a different context.

“The problem before us precedes this docket,” Keeney said. “The problem existed before this docket. I have to weigh any damage keeping the docket open against the damage that has already been done”.

Later during the meeting, Commissioner Bill Kenney said he did not think it is the role of the PSC to give advice on legislation.

“That’s what we we’ve already been doing,” Chairman Kenney replied.

The Missouri Times has learned of a meeting in the Senate Pershing Gallery between Gunn and six legislators when the bill was heard by the Commerce and Energy Committee on Feb. 5 and when it was voted out of committee Feb. 20. Gunn left his post as PSC Chairman March 1.

The meeting was called by Sen. Mike Kehoe, R-Jefferson City, the bill’s sponsor, and Sen. Brad Lager, the Missouri Times has learned.  It included Rep. Jeannie Riddle, R-Callaway County, who has sponsored the companion House bill, House Utilities Committee Chairman Doug Funderburk, R-St. Peters, who supported the bill in his committee, as well as Gunn, and two Senators known not to support the legislation Doug Libla R-Poplar Bluff and Wayne Wallingford R- Cape Girardeau. PSC Commissioner Terry Jarrett also attended the meeting, but by all accounts did not speak to any extent about the legislation.

Specific accounts of the meeting differ, but Sen.’s Doug Libla, R-Poplar Bluff, and Wayne Wallingford, R-Cape Girardeau told The Missouri Times during interviews that they felt that were asked to the meeting to support the ISRS legislation by Gunn in his capacity as PSC chairman.

“Sen.’s Lager and Kehoe invited me to a meeting in the Pershing Gallery conference room to talk about SB 207, and it quickly became clear that the meeting was with a group of people in support of it trying to persuade Sen. Wallingford and myself to join them,” Libla said.

When asked if he felt he was being lobbied in that meeting by the chairman of the PSC to support the ISRS legislation Wallingford said, “I did feel that he was lobbying us to support ISRS, and I do not feel that that is what their role in the process should be.”

In a separate interview, Wallingford said, “Mr. Gunn was explaining how much better it would be for consumers of Ameren to get increased rates up front. I replied to him that I felt that in situations where the improvements were not deemed necessary that their mechanism of issuing credits would ultimately wind up making consumers unwilling investors in Ameren UE”

By all accounts, the meeting turned confrontational when Libla confronted Gunn about his comments in support of ISRS.

“Chairman Gunn repeatedly called ISRS a jobs bill,” Libla said. “I stated, well of course it isn’t.’ It would kill more jobs than any tax increase might. I looked at him and told him I found it remarkable that in his capacity as chairman of the PSC he would be in here lobbying to support this bill or any other bill. The other commissioner didn’t speak very much, but I found the entire meeting inappropriate, and had no problem telling them so.”

In his own interview, Gunn offered a different take on the meeting.

“Yes, the meeting took place, and I was asked to attend the meeting in the gallery, but when I arrived I had no idea who would be attending, or specifically that there would be anyone at the meeting who was against the ISRS concept,” Gunn told The Missouri Times. “I was aware that Sen. Lager and Kehoe would be at the meeting, but didn’t know who else would be there. I simply never lobbied anyone on this legislation. I was requested to attend a meeting to explain the technical aspects of how the water and gas ISRS process works.

Gunn said he has two separate takes on the accusations. First, he said he was only there in an official capacity to provide information.

“I was only there to explain how the process would be implemented if passed,” he said. “This meeting was before there was even a committee substitute written. I was actually there to describe how the process works currently, since there were going to be changes to the bill, I wasn’t going there to talk about the specific implementation of SB207.”

Secondly, Gunn said that any support for the bill was offered as a private citizen, not as the PSC Chairman, and was asked to offer his personal views by Libla.

“I was asked by Sen. Libla for my personal views on the legislation,” he said. “Not as a PSC commissioner, but for my personal views so I explained them to him He asked me after I made it clear I had been invited to the meeting and was only there for informational purposes, but I did have my own view of ISRS.”

As to whether or not he referred to ISRS as a jobs bill, which is a phrase used by many of the bill’s supporters, he said it is “irrefutable” that investing in infrastructure creates an economic impact.

Sen. Brad Lager, R-Maryville, who voted for the bill in his committee, recalled the meeting and said he did not feel Gunn was lobbying for the bill at all.

“There was certainly a moment of confrontation but not lobbying,” Lager added. “Mr. Gunn did say that he personally felt there would be more regulation under ISRS if done properly, but the entire conversation was similar to conversations I have been a part of with previous commissioners such as Robert Clayton.”

Funderburk said he could not recall many of the specifics of the meeting, but did not feel that Gunn was lobbying in support the bill.

“We were discussing several concepts, but I didn’t think there was any lobbying in that meeting,” Funderburk added.

Kehoe, Riddle, and Jarrett were also reportedly at the meeting, but did not immediately return calls for comment.

However, during Wednesday’s PSC meeting, Jarrett said that if during the past the Commission’s advice went beyond technical advice, he would not be supportive of those actions.

The ISRS legislation currently is on the Senate calendar and has reportedly been turned in by the chairman of the House Utilities Committee to the Speaker of the House.

St. Louis Post-Dispatch, March 12, 2013

Ameren Missouri spent most of last year successfully convincing state regulators to boost electric rates.

Now, the utility’s own financial data show that it earned millions of dollars more than authorized in 2012. And that was before the Public Service Commission approved a $263 million increase that took effect in January.

It’s not illegal for Ameren to exceed its allowed return on equity, a key measure of profitability that’s used by the PSC to establish rates, and under state law it’s impossible for customers to recoup the money. But consumer advocates, including some of Ameren’s biggest customers, say it’s proof that utilities don’t need an infrastructure surcharge that would yield millions of dollars in additional revenue.

“It shows you that they had a very good year and that they have plenty of money that they could plow into infrastructure,” said John Coffman, an attorney for the Consumer Council, a nonprofit consumer advocacy group. “The current process allows them to earn a sufficient amount of money, if not overearn.”

Warren Wood, Ameren Missouri’s vice president of legislative and regulatory affairs, disagreed with the assessment. He said the jump in earnings was because of several unusual circumstances, including the hottest summer on record.

“You don’t have to look any further than last summer,” he said.

Other factors also influenced Ameren Missouri’s profitability, he said. The utility didn’t halt its Callaway nuclear plant for refueling last year, it recorded a legal settlement and made an accounting change — all factors that contributed to higher earnings.

“If you take those out of the calculation, our earnings were back below our authorized commission return,” he said.

Ameren Missouri’s 2012 profitability is the latest data point in a fierce debate over Senate Bill 207, legislation proposed by Sen. Mike Kehoe, R-Jefferson City, that would give investor-owned electric utilities the ability to impose a surcharge for infrastructure investments.

Utilities say they need to get paid more quickly for improvements to the electric grid and other investments so they have enough cash to ramp up spending and improve electric reliability.

Critics of the bill — the consumer groups — say the current regulatory system works just fine. They say the bill does more than reimburse utilities more quickly: it pads profits at the expense of consumers who have been slammed hard by repeated rate increases.

The consumer groups last week asked the PSC to declassify a confidential report that Ameren files with the commission every three months, saying it was needed information to the debate in Jefferson City.

Ameren agreed to release parts of the so-called surveillance monitoring report Monday evening. It withheld portions of the report that contain proprietary information.

The report that shows last year’s return on equity, a key measure of profitability, was 11.66 percent. That was far above the 10.2 percent it was authorized to earn. The difference equals about $80 million.

In a note accompanying the report, Ameren said the company’s return would have been 9.5 percent without the “unusual factors” such as the hot summer.

But Lewis Mills, Missouri’s Public Counsel, argues otherwise. “Earning 9.5 (percent) under the current regime argues very strongly that the system’s not broken,” he said.

Wood said all of the focus on the utility’s 2012 earnings ignores that Ameren has for years fallen short of its maximum allowed return.

“Before very recently, we haven’t hit our return on equity a single time in over five years,” he said.

Ameren’s maximum return on equity was reduced by the PSC in December even while the commission approved a rate increase. The lower return reflects a downward national trend in financing costs for utilities linked to lower interest rates.

Still, Ameren expects to again earn less than its new allowed return on equity, Wood said. The projection assumes a planned outage at the Callaway plant for refueling and a return to more normal summer weather.

The debate over Ameren’s return on equity is a common one in the hearing rooms of the Public Service Commission, but less so at the State Capitol. In setting utility rates, regulators try to establish returns in a way that allow the utility to compete for investment capital and that’s fair to consumers. The differences between 10.2 and 9.8 seem small, but add up to millions of dollars that either go to utility shareholders or stay in consumers’ pockets.

Consumers have no way to recover money already paid to a utility. But they can file a formal complaint asking regulators to reduce a utility’s rate if profits exceed the return level established by the PSC.

Doing so, however, is a time-consuming, expensive endeavor. Unlike a rate case in which a utility must prove it needs more revenue, the burden of proof is reversed. And when the commission considers future rates, factors cited by Ameren such as weather are part of the equation.

“You need to have fairly convincing evidence that they have been, are, will be overearning by a significant amount” before filing a complaint, Mills said.

At the very least, he and other consumer groups said it’s a situation worth monitoring closely in the coming months.

Meanwhile, Ameren maintains that last year alone didn’t cure a need for cash to invest. The utility, which is spending about $600 million a year in infrastructure projects now, according to Wood, projects being able to boost investment by $100 million a year if the legislation is approved.

“If you look into the future, you see a need for some incremental level of investment to start working our way through this bow wave of aging infrastructure,” he said.

By Jason Crowell in the St. Louis Post-Dispatch, March 27, 2013

As a former legislator who fought to ensure Missourians kept their hard-earned money, I believe SB 207 and HB 398 are horrible public policy. It is legislation that will hit Missourians the hardest; in their pocket books with a new surcharge on electric bills and faster unnecessary rate increases. I feel so strongly about this new surcharge that will cost Missourians their hard earned money that I ask you to oppose it with me.

The only thing worse than more taxes on Missourians is to institute stealth taxes that take away the economic freedom and opportunity of Missouri families and businesses.

Unfortunately, despite historic majorities in the Missouri legislature, this is precisely what Republicans are considering doing by adding an expensive new surcharge to Missourians’ electric bills.

The proposed new “infrastructure” surcharge is little more than a vehicle for monopoly utility companies like Ameren, Empire Electric & KCP&L, which already operate on the very fringe of our capitalist free market economic system, to take more hard earned money out of Missourians’ pockets. Even worse, this is for the same exact energy we receive today, they just want you and me to pay more for it.

This greed is even more infuriating considering just how good the utilities have it today. Consider Ameren Missouri, which:

• Received an 11.66 percent profit in 2012, despite enjoying the monopoly benefits of zero economic competition.

• Ameren Corporate’s top five executives received over $11.4 million in non-salary bonuses and compensation in 2012 from ratepayers.

• Has raised rates five of the last six years, a 43 percent increase.

• Amassed huge corporate profits off Missouri customers, including over $400 million in 2012.

• Already began charging a fuel surcharge on their customers’ electric bills that have cost $384 million.

The truth is; these utilities could accomplish everything its shareholders desire under the current regulatory system that has long kept Missourians from being gouged by monopoly utilities. However, these new surcharges in the utilities legislation eliminate the few remaining consumer protections in law to give utilities an easier and more rapid way to raise our rates.

Let me give you an example of why this is horrendous public policy. In 2011 the Missouri Public Service Commission denied a request by Ameren to have ratepayers pay for part of the rebuilding of Taum Sauk reservoir. In denying the request, the commission noted that Ameren had taken responsibility for the collapse, which led to a criminal investigation, and huge civil settlements. If instead the proposed infrastructure surcharge had been in place, Ameren would have been able to force ratepayers to start paying for the cost of rebuilding Taum Sauk as part of a surcharge; despite the fact Ameren’s neglect caused this catastrophe.

Giving the utility companies a blank check to raise rates and pile on surcharges will cost Missourians hundreds of millions of dollars, while at the same time provide a disincentive for these utilities to operate more efficient. As long as Ameren, Empire and KCPL are receiving double-digit profits, the more money they spend, the more profits they can realize. This is seen through the inclusion of the cost overrun “tracker” part of this new legislation in order to shift responsibility for cost overruns from the utilities to the consumers.

Republicans used to believe that our economy functioned best when families and small businesses were allowed to decide how to spend more of their hard earned money. Now we see the very legislators who as candidates last fall extolled the virtues of fiscal conservatism and economic freedom, now hiding behind fees and surcharges and tax hikes in order to rob Peter to pay Paul. It is up to all of us to keep the growth of government, taxes and fees at bay. Because when it comes right down to it, a tax is still a tax, regardless of what they are calling it nowadays in Jefferson City.

Please join me in contacting your state legislators and let them know you are against this back door tax increase, no matter what the utilities and politicians call it.

Jason Crowell, an attorney in Cape Girardeau, is a former Missouri state senator.

St. Louis Post-Dispatch, March 28, 2013

In January 2007, Tom Dempsey was one of 50,000 Ameren Missouri customers in St. Charles County whose homes lost power after a fierce winter storm hit the St. Louis region. Mr. Dempsey’s home was without power for 89 hours.

Like many other Ameren customers, he was angry. Unlike most other Ameren customers, he was in a position to do something about it. At the time, Mr. Dempsey, a Republican, was the majority leader of the Missouri House.

“I have four words for Ameren,” he said at the time. “Get your act together.”

Time, and campaign donations, have healed those wounds. Today Mr. Dempsey is president pro tem of the Missouri Senate. Ameren is one of his most generous corporate donors, having funded Mr. Dempsey’s campaign accounts with more than $16,000 since September of last year. For Ameren, it was money well spent.
On Monday, Mr. Dempsey sent a letter to the Public Service Commission asking it to do a curious thing: Cancel plans to provide legislators with detailed information about a bill Ameren is pushing through the Legislature.

Senate Bill 207 would tilt the regulatory environment in Ameren’s favor in two significant ways. First, it would create a new surcharge to allow Ameren to charge consumers more for investments in infrastructure, like new power plants and transmission lines. The surcharge would enable Ameren to recover costs more quickly than a traditional rate case does, thus decreasing Ameren’s risk and putting the burden on consumers.

Second, the bill would get rid of incentives that reward monopoly utility companies for keeping keep their costs down. In effect, Ameren would be rewarded even if its spending surpasses limits suggested by the Public Service Commission.

Consumer groups, from big businesses like Anheuser-Busch InBev, to organizations representing senior citizens on fixed incomes, have predicted the legislation would raise electric rates with little benefit to ratepayers. Our analysis concurs.

Ameren, of course, disagrees. The company says the legislation will spur investment and create jobs.
The great thing about utility legislation is that there is a way to get beyond the he-said, she-said arguments that dominate most political discussion. The law establishes the Public Service Commission as an unbiased arbiter of such matters. The commission’s job is to analyze the full scope of rate requests made by utility companies, balancing the need for energy with protections for consumers. The law not only allows the PSC to help lawmakers analyze such complicated issues, it encourages it.

On March 15, Sen. Eric Schmitt, R-Glendale, asked the commission to investigate the various claims about what SB 207 would and wouldn’t do and gave lawmakers an unbiased look at the facts.

The PSC, in one of its first acts under new chairman Robert Kenney, a Democrat, agreed to open such a docket. It was a good move. Unfortunately, Ameren pushed back hard, using its influence with lawmakers to persuade several of them, including Mr. Dempsey, to ask the PSC to cancel its fact-finding mission.

That’s right: These lawmakers want to consider SB 207 with less information. We know they are data-averse — their cut-the-income-tax bill (SB 26) proves that — but this is ridiculous.

It almost worked.
On Wednesday, under pressure from commissioner Terry Jarrett, a Republican, the PSC almost took Mr. Dempsey’s advice. Fortunately, the PSC voted to keep its investigation of SB 207 open. For now. But it canceled a planned public hearing and limited the scope of its investigation.

That’s unfortunate. Still, the PSC staff will offer an analysis of the bill. That information should help guide lawmakers.

“A full explanation of the facts simply makes sense,” Mr. Schmitt told us. “That shouldn’t scare anybody.”

Mr. Schmitt is right. The old Tom Dempsey would have agreed with him. Just three years ago he signed a letter asking the PSC to conduct a similar fact-finding mission in an unrelated utility matter. And back in 2007, when he was still angry over his 89-hour power outage, Mr. Dempsey sponsored a bill to limit Ameren’s ability to collect a fuel surcharge in cases when the PSC found that the company was surpassing its earning limits.

At the time, Dempsey called on the PSC to “restore public confidence before granting any increase.”

There’s nothing like an unbiased examination of the facts to restore public confidence. Mr. Dempsey was right to ask for it then. Mr. Schmitt is right to ask for one now.

Consumers didn’t fare so well under Ameren Missouri’s request for higher rates in 2013.  Small gains for consumers were overwhelmed by Ameren’s larger gains.

• Consumers Council convinced the Public Service Commission to keep Ameren’s minimum customer service charge at $8.00 instead of Ameren’s proposed $12.00.  All customers pay this charge, no matter how much energy they use.
• The Public Service Commission granted Ameren a profit of 9.8 percent.  That is higher than we wanted but still the lowest in Missouri history.  Ameren had asked to increase its profit (return on equity) to 10.75 percent.  Consumers Council and our allies advocated for 8 percent.
• Consumers lost when the commission decided to approve a 10 percent, $260.2 million rate increase.  The increase took effect Jan. 2. On average, electric bills for the typical residential customer will rise by about $10 a month.
• On the rather confusing issue of what is “transmission” and what is “transportation” the Public Service Commission sided with Ameren.  It is allowing the cost of new transmission projects to be added to a surcharge on all consumers – the fuel adjustment clause (FAC).  CCM’s position is that this illegal because the law allowing a FAC states “transportation” means moving a product and “transmission” does not involve the transportation of any product – any fuel.

In addition, the allowed transmission projects may violate Missouri’s law that doesn’t allow utilities to charge customers for building projects until they are in operation – commonly know as the “construction work in progress” – or CWIP — law.  CCM is considering appealing this issue at the state Western District Court of Appeals.

St. Louis Post-Dispatch, March 23, 2013

ST. LOUIS • Ameren Missouri, fresh off a $263 million electric-rate increase in December, is asking regulators for an additional $51 million in revenue.

The adjustment would increase bills for the typical residential customer by an average of $6.07 a month beginning in June, the utility said in a filing with Missouri Public Service Commission on Friday afternoon. Ameren defines the typical customer as one who uses 12,000 kilowatt-hours a year.

Electric rates and Ameren’s profitability have come into focus in recent weeks because of legislation being pushed by investor-owned utilities that would allow them to implement surcharges to get faster payback on infrastructure projects.

The most recent request to increase revenue is part of a separate surcharge approved by the Legislature in 2005 to help utilities more quickly recover fuel costs.

St. Louis-based Ameren, which sells electricity to 1.2 million customers in Missouri, files papers three times a year for permission to adjust fuel costs up or down. Friday’s filing, known as Fuel Adjustment Charge, reflects the four-month period ended in January.

The adjustments generally reflect changes in coal and natural gas costs and purchased power expenses. Those costs are offset by any revenue the utility receives from sales of excess power to customers outside of its service area — so called “off-system sales.”

In an email response to questions, Ameren Missouri spokeswoman Rita Holmes-Bobo said the requested increase is mostly the product of slumping wholesale power prices, which have led to lower off-system sales.

Unlike a traditional electric rate case, which takes almost a year and involves a thorough audit of a utility’s books, a fuel surcharge request is processed within a few months and with less scrutiny. Only after the surcharge is implemented are the utility’s fuel purchasing practices more carefully examined during a prudence review, said Lewis Mills, Missouri’s public counsel.

Mills, whose office represents consumers in utility cases, had not yet reviewed Ameren’s filing.

The fuel surcharge appears on Ameren bills as “Rider FAC.”