Category: Utilities

Utilities and Opponents are Playing Hardball with Rate Reform

by the Editorial Board for the St. Louis Post-Dispatcth

Ameren Missouri’s cherished rate-reform bill, which has sat dormant in the Missouri House since being passed by the state Senate in mid-February, is meeting 11th-hour challenges — and a threat to force full disclosure of all the money spent to pass it. Missouri consumers’ best hope is for Senate Bill 564 to die before the legislative session ends May 18.

Groups representing both residential and large industrial power users have raised significant doubts about Ameren’s claims that it would benefit consumers by capping rate increases at 2.85 percent per year for residential customers and 2 percent for industrial users.

Opponents argue that changes to the way that the state’s three investor-owned utilities calculate expenses would lead to an effective rate increase of 8 percent to 10 percent — or as much as 20 percent in the view of the Consumers Council of Missouri.

In the Senate, despite political dangers from rate hikes in an election year, a few labor Democrats joined the GOP majority to pass the bill 25-6 in February.

The bill stalled while the House considered its own measure. But as the state’s attention turned to the drama of Gov. Eric Greitens’ upcoming trial in St. Louis, legislative leaders quietly pushed this week for the House to pass the Senate bill without amendments. That would enable it to go back to the Senate for final passage without the threat of a filibuster in the session’s last week.

House leaders indicated Wednesday they were willing to break their promise to allow full and open debate, and to push for a quick vote.

In response, Sen. Doug Libla, R-Poplar Bluff, drafted a letter to Missouri Public Service Commissioner Daniel Hall to immediately require the three investor-owned utilities to disclose all of their political donations and lobbyist spending since 2014. In February, Sen. Rob Schaaf, R-St. Joseph, calculated that the utilities had contributed $900,000 to legislators.

Greitens received about $180,000 from Ameren alone, not counting any undisclosed donations to his “dark money” committee. The PSC can order utilities to disclose dark money contributions.

Even with rate caps in place, SB 564 would allow utilities to potentially make tens of millions more each year from a tool called “Plant In-Service Accounting.” Almost every dollar spent on capital investments could be quickly charged to customers without having to gain PSC approval. Ameren argues that it needs the change to modernize its electric grid, but this accounting tool also would allow it to quickly charge consumers for maintaining the old grid.

Ameren also is holding hostage some $133 million a year in tax savings from the federal tax cut bill that should be returned to customers in the form of a 4.9 percent rate cut. Ameren has done so in Illinois but says Missouri regulators tie its hands. This is not a posture that inspires trust.

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Gas Rates Go Down and Low Income Residents Get Bill Assistance.

For Immediate Release
Contact: Cara Spencer, executive director of Consumers Council of Missouri
314-556-7379
 
Gas Rates Go Down and Low Income Residents Get Bill Assistance.
Jefferson City — The Missouri Public Service Commission just approved Spire’s new natural gas rates – effective April 19 – and your monthly gas bill will actually decrease, with the savings varying cross the state.
Last year, Laclede Gas Company (Spire’s Eastern Missouri territory) requested an increase of $3.31 per month for the average residential customer. But after a full audit and litigation of consumer concerns, these customers will actually see a rate reduction of approximately 5%, or an average of $2.00 per month less for an average residential consumer.
MGE (Spire’s Western Missouri territory) requested a $5.09 per month increase for the average residential customer but these customers will see a rate reduction of approximately 1%, or $0.40 less each month for an average consumer.
The measure is not a slam dunk for consumers – the order granted a very high profit level (9.8%) and approved a Weather Adjustment, which exposes consumers to future rate increases whenever we experience a warmer than normal winter, a rate mechanism that consumers will continue to fight. The Infrastructure System Replacement Surcharge (ISRS) will also continue to grow in the future.
Overall, however, gas bills will go down this month, giving consumers a reason to cheer.
 
But this rate reduction almost didn’t happen. Two years ago, Consumers Council of Missouri successfully fought state legislation (HB 1471 – 2016 / SB 849 – 2016) that would have prevented this rate case from happening. At that time, the gas utility claimed that the legislation would spare ratepayers a costly rate increase.
 “Consumer advocates have been saying for years that gas delivery prices should be reduced, “ says John Coffman of Consumers Council “ and in fact, this is the third full rate case audit in a row that has resulted in some rate reduction for the Laclede Gas area.”
 
Another positive that came out of this most recent rate case was the outline of an improved low-income program, that should end up providing over a million dollars of relief, with rewards for participants who keep current on their bill payments. A settlement provides 120 days for the utility, consumer groups, and community action agencies to work out the details of this new program.

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Missouri bills deregulating utility rates make headway. Consumer protections? Not so much

Bills that would deregulate how MO utility companies set rates are making progress through legislative committees in both the Missouri House and Senate. Another series of bills aimed at increasing consumer protections, however, have all mostly stalled.

https://www.columbiamissourian.com/news/state_news/missouri-bills-deregulating-utility-rates-make-headway-consumer-protections-not/article_d6de1d28-2c71-11e8-bf32-2f4f0314e123.html

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SB564: The FACTS

The Consumers Council of Missouri would like to offer the residential consumer perspective of Senate Bill 564.

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Tax cuts spur KCP&L rate update case.

While KCP&L is proposing a rate increase, CCM is calling for a decrease: calling on state officials to evaluate how the tax cuts might be rolled into utility costs

http://www.newspressnow.com/news/business/tax-cuts-spur-kcp-l-rate-update-case/article_bebbab39-1e1e-5c80-b028-a5fe5eedcb17.html

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Water Rates Skyrocketing?

Massive Water Rate Increase: 45% proposal in St. Louis County. Consumers Council has the following concerns:

The request is based on an estimate of future expenses rather than audited costs, which means that consumers could be overcharged. Rates should be based on actual costs, not guesses.

It would add a charge that would raise rates when usage declines, a “save more, pay more” model. This is would disincentivize conservation and essentially shift the risk burden from the investor-owned utility company to the individual consumer.

Most significantly, the proposal would result in an increase in the St. Louis metro area of a whopping 45 percent!

Join us in voicing concerns.

http://www.stlamerican.com/news/columnists/guest_columnists/massive-water-rate-increase-proposed-in-st-louis-county/article_10b30b56-053c-11e8-af0f-bbf5202328c8.html

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Consumer Groups Concerned about Rate Mechanisms

Consumer groups are concerned with new rate increase mechanisms proposed in legislation before the Missouri Senate.

http://stlouis.cbslocal.com/2018/01/23/ameren-seeks-support-for-plan-that-would-change-way-rate-hikes-approved/

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CCM calls for reduction in utility rates after massive drop in corporate taxes.

Consumers Council of Missouri wants swift attention paid to the new corporate tax rate, which has fallen this year from 35%-to-21% and will bring massive savings to the state’s investor utilities.

The watchdog group says the companies will realize hundreds of millions of dollars in extra money if utility rates continue to be calculated based on the 35% rate.  Consumers Council notes electric companies in Massachusetts, Illinois, Oregon, Arizona and other states have announced plans to pass savings on to consumers as a result of the 40% drop in corporate income taxes.

https://www.missourinet.com/2018/01/23/consumer-watchdog-calls-for-reduction-in-missouri-utility-rates-after-massive-drop-in-corporate-tax-rates/

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Corporate Tax Break Reduces Utility Bills in Many States, MO?

JEFFERSON CITY / ST. LOUIS — January 22, 2018

Consumers Council of Missouri is calling for the state of Missouri to take swift action to evaluate and the pass through to consumers the hundreds of millions of dollars utility companies will enjoy following the passage of the new tax law. Current utility rates are calculated based on a corporate tax of 35%, a rate which was just dropped by a whopping 40%.

 

Electric companies in Massachusetts, Illinois, Oregon, Arizona and other states have announced plans to pass these massive tax savings on to customers through lower rates and some of the largest utilities in the country have voluntarily established a plan to reduce rates. We are looking to Missouri to do the same.

 

The Public Service Commission has opened a docket to take comments from utility companies as well as the general public. We encourage consumers to weigh in and will be watching closely.

 

for more information contact:

Cara Spencer, Executive Director   cara@moconsumers.org, (314) 556-7379
John Coffman, Utility Consumer Counsel                               (573) 424-6779

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