Category: Utilities

Big WIN for MO consumers!

Regulators disallowing utility payments at payday loan stations.

Allowing monopoly companies to use payday loan stations gives legitimacy to predatory business and facilitates the use of high interest loads to pay for necessary services.

Its vitally important to have consumer groups who are willing to advocate for and push for policies that protect citizens from predatory businesses. Support Consumers Council of Missouri along with AARP Missouri, Empower Missouri and other advocates who fight for what’s right.

http://www.bizjournals.com/stlouis/news/2016/09/15/missouri-regulators-disallow-utility-payments-at.html?ana=twt

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Its time for PSC hearing for Laclede

Regulators have issued a scathing report outlining increasing rates and improperly allocated costs by Laclede Gas. Its time to open a formal PSC hearing.

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Ameren Customer Alert: Details of How, Why Your Electric Bill Went Up in June

Consumers Council of Missouri

ST. LOUIS, Mo., July 1, 2015. The rate increase Ameren Missouri won in its most recent rate case showed up on your electric bill last month.

From 2007 through 2014, Ameren Missouri received increases of more than 43 percent in the rates that it charges residential consumers.  And that doesn’t count increases in its fuel surcharge, which adds significantly to the company’s bottom line.  During most of that period, when the bulk of Ameren’s customers were suffering from a lagging economy, the Public Service Commission authorized the company to make a profit of about 10 percent, plus the surcharge, which passed- through millions in fuel expenses to customers — making it a very healthy company indeed.

In fact, records, revealed because of Consumers Council’s legal actions, show that for nearly two years the company’s actual profit far exceeded the amount authorized by the PSC.  And we made that point during the rate case, when the company was asking for even more money from its customers.

Nevertheless, although any rate increase is a burden for most households, we feel fortunate consumers fared as well as we did, with only a 5 percent increase resulting from this most recent rate case.  If not for our efforts, the outcome could have been much worse.  We achieved some significant victories in other areas of the rate case that will help keep electric rates fairer into the future.

News reports on the case were mixed and confusing.  So we’d like to explain our perspective and why we believe consumers made some important gains:

â€Ē  Ameren asked for a 9.65 percent rate increase of $264 million.  But after the audit in the case and our advocacy efforts, Ameren was allowed an increase of only $121 million, with residential customers rates going up about 5 percent, — an increase of $5-$7 a month for the average customer.

â€Ē  The corporate profit allowed was reduced to 9.53 percent from 9.8 percent. This will save customers tens of millions of dollars a year.

â€Ē  Several rate-tracking mechanisms were eliminated, and several cost efficiency incentives were restored.  This will increase transparency and allow consumer advocates to challenge future cost increases instead of their being automatically applied.

â€Ē  The fuel adjustment surcharge was reauthorized, but the company is no longer allowed to slip unrelated transmission costs into it.

â€Ē  The monthly customer charge remains at $8 for residential customers.  The trend across the country has been for utilities to increase this fixed charge by huge percentages.  Holding the line on fixed charges (and thus applying increases to usage fees) helps low usage customers, many of whom are low-income, seniors and folks who strive hard to keep their monthly bills under control through conservation and efficiency.

â€Ē  The PSC gave Ameren’s largest customer, Noranda Aluminum, a special rate for three years, along with several consumer protections we recommended.  This provision was controversial and one that CCM worked on very hard.  The impact on all other residential and business customers is a less than 0.5 percent shift.  Noranda had requested more than double that shift.  The result is less than what the evidence proved would have been the impact if the aluminum smelter went out of business or if it had gotten a special wholesale contract as proposed by Ameren.  The PSC decision includes several consumer protections advocated by Consumers Council that will help ensure that neither Ameren nor Noranda receives a windfall from the arrangement.

Consumers Council of Missouri works in coalition with the Fair Energy Rate Action Fund, which is made up of groups representing residential customers – AARP and Empower Missouri, in addition to CCM; Missouri Association of Retailers, representing businesses of all sizes; and several large corporations – Ford Motor Company, Noranda Aluminum and Cargill.  We support each other in our efforts to make Missouri’s utility rates fair and affordable for all consumers.

We appreciate the healthy discussion of the issues as expressed in the Post-Dispatch’s editorial, which concluded with an understanding of realpolitik in Missouri that we confront daily.

Click here to see the Post-Dispatch Editorial.

Click here to read the Post-Dispatch story on the rate case decision.

Click here to read the Public Service Commission’s final order in the rate case.

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KCP&L Seeks Extreme Increases in Customer Charge, Electric Rates

Customers May Voice Opposition at Upcoming Hearings

KCP&L customers face a whopping 177 percent rate increase in their monthly customer charge if the electric utility gets its way before the Missouri Public Service Commission.  In the rate case, which starts with public hearings on Tuesday, April 21, the utility wants to increase the charge to $25 per month from $9 per month.  The company is asking also for a 15.8 percent increase in the usage rate.

Raising the usage rate for electricity is hard enough on customers.  But increasing the fixed monthly customer charge is also poor public policy:

  • It disproportionately shifts costs to low users, including poor people and seniors who already struggle to pay their utility bills.
  • It discourages conservation by putting higher costs on fixed charges and not on usage.
  • It gives customers less control over their energy spending.

Customers have the opportunity to tell the commission how these higher charges would affect the budgets of their family and/or their business.  They may speak at the following public hearings:

Tuesday, April 21, at NOON — Martin Community Center, 1985 South Odell Avenue, Marshall, Missouri 65340

Tuesday, April 21, at 6 p.m. — Lincoln College Prepatory Academy, 2111 Woodland Avenue, Kansas City, Missouri 64108

Wednesday, April 22, at 6 p.m. — Cohen Conference Center, Kansas City Public Library, Plaza Branch, 4801 Main Street, Kansas City, Missouri 64112

Thursday, April 23, at 6 p.m. — Gladstone Community Center, 6901 North Holmes Street, Gladstone, Missouri 64118

Monday, April 28 at 6 p.m. — Belton High School, 801 West North Avenue, Belton, Missouri 64012 

Each hearing will begin with an informal question and answer session. If you are unable to attend a live public hearing and wish to make written comments or secure additional information, you may contact:

The Public Service Commission, P.O. Box 360, Jefferson City, Missouri 65102, telephone: (800) 392-4211, email: pscinfo@psc.mo.gov;

The Office of the Public Counsel, P.O. Box 2230, Jefferson City, Missouri 65102, telephone: (866) 922-2959, email: opcservice@ded.mo.gov; or

Comments may also be registered in the case using the Public Service Commission’s electronic filing and information system (“EFIS”) CLICK HERE and enter “ER-2014-0370” in the “Case/Tracking No.” field.

These local public hearings will be held in facilities that meet the accessibility requirements of the Americans with Disabilities Act.  Any person who needs additional accommodations to participate in these hearings should call the Public Service Commission’s hotline at 1-800-392-4211 (voice) or Relay Missouri at 711 before the hearings.

Background:

On October 30, 2014, Kansas City Power & Light Company filed an electric rate case with the Missouri Public Service Commission seeking to increase annual electric operating revenues by approximately $120 million (15.8 percent).

For the average KCP&L residential customer using 867 kilowatt hours of electricity, the proposed increase would be approximately $14 per month.  This would be in addition to the $25 monthly charge.

KCP&L has also asked the commission to establish a Fuel Adjustment Clause (FAC), which would allow KCP&L to recover from, or return to, customers increases or decreases in the cost of fuel, power purchased and transmission costs.  The FAC amount would appear as a line item on the bill based on the customer’s monthly energy usage. The FAC factor would change every six months, upon review and approval of the commission, after costs have been incurred.

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Ameren Wants to Raise Your Rates Again!

Take the Opportunity to Tell Regulators How Higher Electric Bills Would Affect Your Budget

Ameren Missouri wants to increase the rates customers pay by nearly 10 percent (9.65 percent) in order to raise its income by $265 million a year.  Since 2008 Ameren customers have suffered under rate increases of more than 43 percent.

The company also wants to raise the profit it can earn to 10.4 percent from the current 9.8 percent.  Consumer advocates want to lower that percentage to 9.1 percent.  Ameren also wants to continue the fuel adjustment charge, which allows it to raise customers’ rates when the price of fuel goes up.  Consumers want to eliminate the fuel adjustment charge.

Submit Written Comments

Public hearings took place In January, but the case continues.  If you were unable to attend a hearing you may submit written comments to the commission.  Click here to go to the comment page on the PSC website.  The case tracking number is ER-2014-0258.

The PSC is not obligated to consider written comments as it does testimony at public hearings, which is given under oath.

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Nixon Appoints Ex-Chiefs QB to PSC

St. Louis Beacon, January 9, 2013

Gov. Jay Nixon has appointed Bill Kenney to the Missouri Public Service Commission, a move that could end a temporary logjam for the powerful entity that regulates the state’s utilities.

Kenney is a former Republican state senator from the Kansas City area who most recently served as Lt. Gov. Peter Kinder’s chief of staff. He is perhaps best known for his tenure as a quarterback for the Kansas City Chiefs.

“As a former two-term state senator and Senate majority floor leader, Bill Kenney has the experience and knowledge necessary to be a valuable member of the Public Service Commission,” Nixon said in a statement. “I am confident he will put those skills to effective use on behalf of Missouri families, businesses and communities while serving on the PSC.”

Nixon’s move was important because Republicans may have blocked PSC Commissioner Steve Stoll’s nomination without a corresponding Republican appointment. Stoll is a former Democratic state senator.

The Associated Press reported last year that GOP senators had no problem with Stoll’s nomination but wanted the governor to fill a vacancy caused by the departure of Republican PSC Commissioner Jeff Davis.

Kinder – who served as Senate president pro tem when Kenney was in office – released a statement praising the move. He called Kenney “a distinguished public servant who served honorably as the majority leader of the Senate and has been an asset to the lieutenant governor’s office.”

“I am pleased that Gov. Nixon appointed my chief of staff, Bill Kenney, to the Public Service Commission – the second time a Democratic governor has selected my chief of staff for this important governmental body,” Kinder said. “Gov. Bob Holden appointed Jeff Davis from my office in 2004, and now Gov. Nixon has picked Bill Kenney as Jeff’s replacement. â€Ķ I wish him well in his new position.”

The Public Service Commission is responsible, among other things, for deciding utility cases and for the promulgation and enforcement of administrative rules. Kenney’s appointment must be approved by the Missouri Senate.

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Coalition Disputes PSC Ameren Ruling

Jefferson City News Tribune, October 6, 2014

The Fair Energy Rate Action Fund, or FERAF, thinks the Missouri Public Service Commission got it wrong last week.

With a unanimous vote, the five-member commission on Wednesday said that Noranda Aluminum had not made its case that Ameren had taken in more money than its current rates allowed, making those rates “unjust and unreasonable.”

“Ameren’s own quarterly reports show it has earned excessive profits for the past 33 months,” Chris Roepe, FERAF’s executive director, said in an email. “We are disappointed that Ameren was not told to lower all customers’ rates by millions of dollars because of its over-earning.”

In part of last week’s 22-page order denying the over-earnings complaint, the PSC seemed to agree with the over-earnings claims, based on the “surveillance” reports Ameren must file with the commission every quarter: “The September 30, 2013, surveillance report shows that Ameren Missouri earned an actual return on equity of 10.32 percent for the twelve months ending September 30, 2013.

“Ameren Missouri’s authorized return on equity, established in its last rate case, was 9.8 percent.

“Those numbers would indicate that Ameren Missouri earned approximately $29.2 million more than its authorized rate of return during that period. Earlier surveillance reports also show that Ameren Missouri earned more than its authorized rate of return in those periods.”

But, the commissioners added, “It is important to understand that the earnings levels reported in the surveillance reports are actual per book earnings of the utility and cannot be compared directly to an authorized return on equity to determine whether a utility is over-earning.

“Actual per book earnings are often computed differently than earnings used for the purpose of establishing rates.”

Additionally, the commissioners noted, book earnings fluctuate from month-to-month and season-to-season, as power demands change. Nor do they account for planned expenses that haven’t happened, yet — such as rebates Ameren must pay to customers adding solar units, and capital improvements being made to Ameren’s distribution system.

The commission sees the return-on-equity number it sets in a rate case as a target that the utility will sometimes be above and, other times, be below.

But FERAF, and others, argue that it is a cap, a top limit to a utility’s earnings.

“This is money taken directly out of the pockets of Missouri families, who have nowhere else to get their electricity because Ameren is a monopoly,” Roepe said. “We can’t imagine a more blatant case of over-earning by a monopoly than this one.”

In a separate, also unanimous vote, the PSC on Wednesday rejected several formal motions — and numerous letters from politicians — to rehear Noranda’s request for a substantial reduction in the rate it pays to buy electricity from Ameren Missouri.

The commission on Aug. 20 denied Noranda’s request to cut its electric rate by about 25 percent and — to keep Ameren’s income revenue-neutral — raise all other customers’ rates by around 2 percent.

In that case — as well as the over-earnings case decided last week — the commissioners said Noranda’s evidence presented both in prepared testimony and in the PSC’s formal hearings ultimately didn’t make the case that it needed a better rate for its electricity than the lowest rate of any Ameren customer.

Commissioners have approved that lowest rate because Noranda’s demand for electricity is constant and predictable, and Ameren’s costs to provide that power are less than its costs for most other classes of customers.

But, the commissioners said in the August order: “Missouri law forbids a utility to charge a rate that gives an undue or unreasonable preference to any particular customer or class of customers, and the Commission cannot lawfully approve such a rate.

“Since the Complainants are asking the Commission to order Ameren Missouri to charge Noranda a rate that is not based on the utility’s cost to serve that customer, they bear the burden of proving that such a subsidized rate is just and reasonable and is not an undue or unreasonable preference to a particular customer.

“The Complainants have not carried that burden.”

After the commission denied the rate-change request in August, the company said it would have to lay off up to 200 of its nearly 900 employees.

After the formal hearings in June, but before the PSC issued its order, Missouri’s Public Counsel’s office proposed an alternate rate-change idea that would reduce Noranda’s rate by about 16 percent and raise other customers’ rates by only about 1 percent.

Gov. Jay Nixon and most of the lawmakers from Southeast Missouri also backed the idea.

Before casting last week’s vote against rehearing the rate-change request, commissioners again noted the parties still could reach a compromise as part of Ameren’s new rate case, which the PSC must decide by next May.

But Noranda spokesman John Parker said that “will likely be too late for the 125 to 200 employees whose jobs will be lost based on the PSC’s decision.”

And state Sen. Doug Libla, R-Poplar Bluff, said in a news release: “The PSC missed yet another opportunity to do something crucial for our rural economy, especially for Southeast Missouri.

“This lack of leadership for Missouri ratepayers by the PSC and Governor Nixon is frustrating. We need urgent action now by the Governor to protect these jobs, families, and communities.

“This lackluster effort and reasoning is both puzzling and very disappointing.”

State Sen. Jason Holsman, D-Kansas City, also weighed in, sending commissioners a copy of a Sept. 24 story from an American Metal Market publication, reporting that Niagara Worldwide won’t re-open a smelter it bought in Ohio, because of an “electricity rate (that) is simply too high.”

Holsman also urged the PSC to rehear the rate change request, “allowing Noranda to operate for years to come.”

Commissioners have said, repeatedly, that economic development isn’t their responsibility.

In August they wrote: “A request for an economic development subsidy of this magnitude is more properly directed to the Missouri General Assembly.”

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PSC Lands Double Blow on Consumers in 2 Electric Rate Cases, Sides with Ameren

St. Louis Post-Dispatch, October 1, 2014

In dual victories for Ameren Missouri, Missouri regulators dismissed on Wednesday an overearnings complaint against the utility and a request from Noranda Aluminum to reconsider its case for a lower electric rate.

The Missouri Public Service Commission’s order denied the southeast Missouri smelter’s rehearing request in a case that began in February. The smelter initially sought a rate that would lower its $170 million annual power bill by about $50 million a year, but the state’s consumer advocate later proposed a compromise after the PSC indicated it would reject the original request.

Noranda and the Office of Public Counsel sought a rehearing so the PSC could more fully consider the compromise proposal, which would have reduced Noranda’s rates by about 16 percent rather than nearly 25 percent. A lower rate for Noranda would likely have led to higher rates for Ameren’s other customers.

PSC Chair Robert Kenney urged the parties to present their compromise proposal when hearings begin early next year on Ameren’s ongoing rate case.

“There is an opportunity in the rate case to present those intriguing proposals yet again and the parties are encouraged to do that,” he said.

Noranda Aluminum is Ameren Missouri’s largest customer, and it already pays a lower rate for electricity than other, smaller customers. Ameren asked the PSC in July to raise rates on all of its customers by 9.7 percent.

Noranda has argued it faces a liquidity crisis and that it needs a lower electric rate to conserve cash or it will be forced to close. In early September, it announced it would lay off 125 to 200 people over the next six months while it waited for the PSC to reconsider its rate request. A more favorable ruling, Noranda said, might allow it to save some of those jobs.

While Noranda initially argued it would be forced to close without a lower rate, aluminum prices have recovered in recent months as warehouse stocks and global production fell. Bloomberg reported Wednesday that consumption of the metal is expected to exceed production by 806,000 tons this year. Last month, Goldman Sachs upgraded Noranda to a “buy” rating from neutral, and its stock has risen by about 20 percent over the last three months.

The company said it “vigorously pursue” the public counsel’s compromise proposal during Ameren’s general rate case.

“Unfortunately, since rate relief from that path, if any, would not under normal circumstances be effective until June 2015 it will likely be too late for the 125 to 200 employees whose jobs will be lost based on the PSC’s decision,” Noranda spokesman John Parker said in an email.

The PSC also formally denied an overearnings complaint from Noranda and consumer groups that had the potential to lower bills for all customers. Commissioners last month indicated they were unconvinced Ameren had earned above its allowed return.

Consumer groups cited quarterly surveillance reports, which indicated the utility was earning above its allowed return on equity, or profit.

While the PSC and its staff did not dispute the figures, they said those reports measure earnings differently than a cost of service study conducted to set rates. Utility earnings sometimes rise above allowed earnings, but the PSC pointed out times in the last several years when earnings have fallen below the allowed rate of return.

The surveillance reports also don’t take into account ongoing spending, such as environmental controls at Ameren’s Labadie power plant and solar rebates. A more comprehensive study adjusts earnings for one-time costs such as abnormally hot or cold seasons.

“Failing to consider all relevant factors when adjusting a utility’s rates is condemned as single-issue rate making and is generally prohibited in Missouri,” the commission said in its order.

The commission also voted to keep the latest surveillance report confidential. Noranda and its allies had requested it be made public, which the PSC had done for past reports during the overearnings case. Now that the case is closed, though, “there is no reason to set aside the provision of the rule that makes the surveillance report highly confidential,” the PSC said in its order.

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Editorial: Split the Utility Baby in Noranda-Ameren Dispute Over Rates

St. Louis Post-Dispatch, August 5, 2014

If you rely on Ameren Missouri for electricity, as most people in the region west of the Mississippi do, here is what you need to know about the utility monopoly’s months-long rate battle with its largest customer:

One way or another, you are going to pay more.

In March, Noranda Aluminum, which operates a huge smelter in New Madrid in southeast Missouri, said it needed lower rates to stay competitive in a depressed aluminum market. Manufacturing aluminum requires tremendous amounts of electric power; industry-wide, it is estimated that electricity represents about a third of the cost of an ingot of aluminum.

When Noranda made its rate request, it also asked the Public Service Commission to punish Ameren for earning more than the investor-owned monopoly’s regulated return on investment.

The PSC could rule on one or both cases any day.

The simple math is that consumers lose if Noranda wins. Also, consumers lose if Ameren wins. In Missouri, consumers lose no matter what because the game is entirely rigged against them.

The dispute over whether Ameren has earned more than the 9.8 percent profit established by the PSC makes that painfully clear.

The PSC sets that target return on investment whenever a utility seeks a rate hike, by balancing the company’s need for growth and profit with consumers’ need for affordable, consistent rates for electricity. Because Ameren is a monopoly, the PSC’s role is to provide the pressures that might otherwise be provided in a competitive environment. To keep Ameren honest, the company is required to file “surveillance reports” to show whether it is earning more than is allowed.

But the PSC has determined those reports are confidential. So, for several months, a select number of attorneys and others involved in the previous rate case have known what the reports show: That Ameren has over-earned by tens of millions of dollars over the past year.

Those attorneys couldn’t talk about it, however. They asked the PSC to release the reports and the PSC said no. Ameren claimed it wasn’t over-earning, but it also sought to keep the reports confidential.

Here’s how Noranda described the situation in its opening statement in the over-earnings case:

“What is the point of requiring surveillance monitoring reports … if, when those reports evidence over-earning, the commission does nothing about it?”

Late last month, just before the PSC’s hearing on Ameren’s over-earning was to begin, a judge finally opened up the reports. From July 2012 to March 2014, they show a consistent pattern of Ameren earning above its regulated rate of return. It can be argued that money rightfully belongs to Ameren’s consumers, not its shareholders. The over-earning, depending on who is doing the counting, is currently somewhere between about $25 million and $60 million a year.

But it gets worse for consumers.

The standard for showing whether those figures actually constitute the legal definition of over-earning involves a complicated and expensive process. Ameren employs lots of lawyers and experts. The staff of the PSC, and the Office of Public Counsel, which is supposed to represent consumers, don’t have the resources to complete.

Meanwhile, Ameren’s next rate increase request, in which a full analysis of its books will take place, is about to start. Worth noting: Ameren has been successful in increasing its rates by more than 40 percent in the past six years.

The way the system is set up right now, Ameren has no incentive to not gouge consumers because the regulators are too weak to do anything about it. The Legislature could fix that, but Ameren also employs lots of lobbyists and makes lots of campaign donations.

All of that explains why consumers are supporting what amounts to a massive subsidy to Noranda. The aluminum company is the only consumer, it seems, with deep enough pockets to take on Ameren at either the PSC or in the Legislature.

In March, when the two cases were filed by Noranda, we wrote: “Our hope is that the PSC dials back the gluttony of both behemoths.”

The PSC could still do precisely that. A group of consumers has negotiated a possible settlement to Noranda’s request to decrease rates that would allow a subsidy of about $21 million a year for the next five years, subject to Noranda maintaining its job base in southeast Missouri.

That’s much less than Noranda asked for. Even so, the subsidy would raise the average residential consumer’s rates by less than 1 percent. But if Ameren’s No. 1 customer folded up shop and left Missouri, everyone else’s rates would go up even more.

The PSC should agree to that settlement, while also returning to consumers a similar amount in over-earnings that Ameren has pocketed over the past two years. The surveillance reports and the testimony in the over-earnings case tell the PSC commissioners all they need to know. Ameren has over-earned. Make them give some of the money back.

Ultimately, the Legislature should get serious about protecting consumers by funding the Office of Public Counsel to a level that would negate the need for consumers to have to rely on Noranda or other large industrial companies to do their heavy lifting for them.

We won’t hold our breath over that one.

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Ameren Seeks More from Consumers Through Monthly Fuel Charge Hike

Associate Press, July 29, 2014

JEFFERSON CITY, Mo. â€Ē Ameren Missouri is seeking approval to add about $1.50 to customers’ monthly electric bills.

The Missouri Public Service Commission says Ameren wants to adjust the monthly fee that compensates the utility for changes in fuel costs at its power plants among other things.

The PSC says the proposal would increase the fee on an average residential customer’s electric bill to $5.17 from the current $3.63 a month. It would take effect in October.

The proposed fee increase comes as Ameren Missouri already is seeking approval in a separate case to raise its electricity rates. The PSC also is hearing testimony in a case filed by Noranda Aluminum and other consumers alleging that Ameren’s rates should be reduced because it’s earning more than allowed.

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