St. Louis Post-Dispatch, June 1, 2013

Gas-distribution rates would remain unchanged for Laclede Gas Co. customers under a settlement between the utility and consumer advocates that was submitted to the Public Service Commission on May 31.

The St. Louis-based gas utility had sought a $48.4 million rate increase in December that would have raised the typical residential customer bill an average of $4.93 a month.

But Laclede said it can live without an increase for now.

Instead, it is hoping PSC staff will focus attention on the company’s pending $975 million acquisition of Missouri Gas Energy, which requires regulatory approval.

“We believe we can continue to provide safe and reliable service for our customers without general rate increases at this time,” Laclede Gas president Steve Lindsey said in a statement.

The settlement was submitted to the PSC on Friday.

The commission has scheduled public hearings on Laclede’s rate request beginning Monday in St. Louis.

While customers’ overall bills would be unaffected if the settlement is approved, Laclede would be allowed add $14.8 million already being collected through an infrastructure surcharge to its gas-delivery rates.

Laclede also said it will continue to seek small adjustments to rates throughout the year to reflect changes in natural gas costs and to pay for additional pipeline safety upgrades.

The utility sells natural gas to 630,000 customers in the city of St. Louis and surrounding Missouri counties.

CCM Board Member Renee Marver presented the following testimony before the Public Utilities Committee of the St. Louis Board of Aldermen on Wednesday, July 2:

Good evening.  My name is Renee Marver.  I am a resident of the City of St. Louis and member of the Consumers Council of Missouri Board of Directors.

Consumers Council of Missouri is a statewide membership organization that focuses much of its advocacy on protecting utility consumers — consumers who deserve safe and adequate utility service at affordable and fair rates.  We represent the interests of individual consumers collectively, both in advocacy for public policy and in regulatory and legal actions.

We are pleased that the City of St. Louis is exploring ideas for achieving operational and economic efficiencies within its Water Division.  We are also pleased that the city is maximizing its options by seeking proposals from a variety of consulting sources.

However, other jurisdictions’ experiences with consulting services have provided some cautionary tales that have led us to pay close attention to the proposals you are reviewing tonight.  As you consider what is in the best interest of St. Louis water customers, we ask that you keep in mind the following principles of good government and public service:

1.     Paramount among the Consumers Council’s concerns is that the city not go down a path that would make the Water Division less responsive to the public.  St. Louis currently enjoys water quality that is of high quality.
To ensure that this level of quality is maintained, we hope that the city and its elected representatives will continue to be ultimately responsible for water quality, including treatment and testing.
Equally important is that the city continue to be ultimately responsible for setting the water rates that are paid by city residents.
The city should be wary of any contract that defers sits operational or rate-setting responsibilities to an unregulated and unelected entity.

2.      Seeking competitive bids is a good government practice for consultants, contractors and sub-contractors.  We urge the city to insist on this practice and to reject consulting proposals that do not employ this practice.

3.       One of the positive aspects of a municipal water system is that the utility rate structure does not contain private profits.  The city should ensure that its residents receive the economic benefit of future operational cost savings and that such savings not disappear into the coffers of a private entity.

In addition, please be wary of incentives or “shared savings” arrangements that unfairly divert too much of such savings away from the St. Louisans whom you serve.

Thank you for the opportunity to make these comments.  Consumers Council of Missouri will follow this issue with great interest.  We stand ready to assist in any way our expertise as consumer advocates may allow.

Excerpted from St. Louis Post-Dispatch Editorial, May 30, 2013

The Utility Handouts

Early in the session, before lawmakers were fully educated on the dangers of single-issue rate-making in the case of monopoly gas and electric utilities, the Missouri Senate passed SB 240, which would do two bad things for consumers. First, it would expand the existing ability of gas utility companies to charge consumers an extra surcharge to pay for underground pipes and other infrastructure. Consumers would extend free credit to the utility company.

Currently gas companies can impose a three-year surcharge of up to 10 percent of their base rates. Lawmakers upped that to five years and 13 percent, even though the monopoly gas companies (such as Ameren Missouri and Laclede Gas) haven’t made the case that the existing surcharge isn’t doing the job. Second (and worse), the bill also forces consumers to pay up to 90 percent of the bad debt written off by the gas utilities, taking away the existing incentive for the monopolies to collect their debts.

With this bill, consumers lose big. By the end of the session, a bipartisan group of senators had realized that. So there’s little danger that the governor’s veto would be overridden. He should kill the bill.

Although a tentative agreement on Laclede Gas Co.’s rate case has been reached witht he company, the Public Service Commission staff and the Office of Public Counsel, hearings are still scheduled to be held in the St. Louis Region.

Click here for the calendar of hearings.

St. Louis Post-Dispatch, May 20, 2013

Laclede Gas Co. has an agreement in principle with the Missouri Public Service Commission staff and Office of Public Counsel to settle its request to boost natural gas rates by $48.4 million.

The utility filed notice of the agreement with the PSC on Monday, and said it would “resolve all outstanding matters” in the case. Terms were not disclosed.

A formal stipulation and agreement or an update on the status of negotiations with PSC staff and Office of Public Counsel will be filed by June 3, Laclede said.

That is the same date as the first of three scheduled public hearings on Laclede’s proposed rate increase. It is anticipated the hearings will be held as planned.

The St. Louis-based utility filed for a rate increase on Dec. 21 to recover investments in its 16,000-mile gas pipeline system.

As proposed, the average monthly bill for residential customers would increase by $4.93.

In a related Securities and Exchange Commission filing, Laclede said prompt resolution of the rate case would allow parties to focus attention on the company’s proposed $1.04 billion purchase of Missouri Gas Energy — a transaction that will almost double its presence in the state.

PSC approval of the transaction is required.

Separately, Laclede’s parent company, Laclede Group Inc., on Monday announced the planned public offering of up to 8.7 million common shares of stock to help fund the Missouri Gas Energy purchase.

Laclede also expects to grant underwriters a 30-day option to purchase up to 1.3 million additional shares.

The company, which had 22.7 million shares outstanding as of April 26, had said it would issue a combination of debt and equity to finance the Missouri Gas Energy purchase.

St. Louis Post-Dispatch, May 6, 2013

A bipartisan group of lawmakers is blocking a bill that would allow Ameren Missouri to raise electric rates on consumers more quickly with less regulatory oversight. Good for them. Now they should also block Senate Bill 240, which expands the ability of regulated gas utilities, such as Laclede Gas and Ameren, to raise rates outside the normal rate-case process. The bill would hit residential and small-business consumers the hardest. It is, quite simply, a money-grab by regulated monopoly utility companies that by all accounts are doing quite well financially.

If it weren’t such a bad bill, we’d have to take our hats off to the utility lobby for their clever shell game. With their right hand, they waved around the shiny object, Ameren’s Senate Bill 207, telling lawmakers they simply wanted an infrastructure just like gas companies had.

Meanwhile, with their left hands, the same coalition of utilities was advancing Senate Bill 240, a bill that completely changes the playing field on the existing gas surcharge.

Either way, consumers lose.

Unfortunately, the bill already passed the Senate and now just needs a final House vote to go to the governor. Majority floor leader Rep. John Diehl, R-Town and Country, would pick the pockets of businesses and homeowners if he lets this bad bill pass with no changes. It would guarantee that consumers would pay more to heat and cool their homes. He and Speaker of the House Tim Jones, R-Eureka, should use their considerable power to slow down this attack on consumers. Failing that, Gov. Jay Nixon should start warming up his veto pen.

ST. LOUIS, Mo., April 8, 2013 — An analysis by the staff of the Public Service Commission finds that under legislation pending in the Missouri General Assembly consumers would have to pay higher rates faster for electric utility infrastructure investments and would lose protections afforded under current law.

“These are exactly the points we at Consumers Council of Missouri have been making as we educate the public and legislators about the dangers of piecemeal ratemaking,” said Joan Bray, interim director of the organization.  “In the next four years, consumers across the state could be charged more than $600 million for building or repairing facilities without the utilities having to initially justify the costs.”

Consumers Council asserts that consumers fare better under the general ratemaking process in Missouri, when all revenues and liabilities of a utility are examined, Bray said.  A single-issue surcharge as proposed in Senate Bill 207 and House Bill 398 avoids such scrutiny.

The analysis responded to questions Senator Eric Schmitt (R-Glendale) posed to the PSC staff regarding the two bills.

Bray noted that the PSC staff analysis makes a great case that the current law is doing a good job of providing safe and reliable electric systems that consumers expect and need.  In fact, the report quotes executives of four investor-owned utilities in Missouri boasting about the reliability of their service, she said.

According to the analysis, the bill proposes two mechanisms that could dramatically affect consumers’ bills: an Infrastructure System Replacement and Addition Surcharge, or ISRS, and a “tracker.”  Regarding the surcharge, the report says, the “Staff is of the opinion that use of the ISRS rate mechanism included in SB 207 will have the impact of charging electric customers in Missouri higher rate levels at any point between general rate proceedings than would be charged to them under traditional rate regulation. … For all electric utilities combined, the amount of total ISRS increases over a four-year period would be approximately $275 million, according to the Staff’s updated estimates.”

The report also says “items … qualifying for the ‘tracker’ have tended to result in increases in a utility’s revenue requirement over time. No significant cost of service items that tend to decrease a utility’s revenue requirement over time … are included…. It is almost a certainty that implementation of this provision will mean higher customer rates in the future than would be authorized under traditional ratemaking regulation.”  The report estimates the tracker could cost Missourians $327 million over four years.

PSC Staff Analysis of SB207

Associate Press, April 16, 2013

JEFFERSON CITY, Mo. — The Missouri Senate has rejected a bill that would have allowed additional water and sewer companies to seek permission for surcharges to build new infrastructure.

Currently, only water companies in St. Louis County can impose such a surcharge between formal rate cases. Other water companies must get approval for a rate increase from the state Public Service Commission.

The legislation defeated by a 17-16 vote Tuesday would have allowed certain water companies across the state to levy the surcharge between cases. The surcharge could have been used for replacement lines and meters in addition to energy efficiency initiatives.

Supporters said the process worked in St. Louis County and should be opened up to other companies. Opponents said it would have raised utility rates without proper oversight.
—
The water bill is SB297

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