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.

Missourinet, March 4, 2013 

This week is National Consumer Protection Week. Attorney General Chris Koster has released the list of top 10 complaints reported to his Consumer Protection Hotline by Missourians in 2012. Unwanted telemarketing calls top the list.

The Missouri Attorney General’s Office says it has obtained more than $1.4 million in judgments against telemarketers in 2012, up about $1 million in 2011.

“Complaints about unwanted calls have increased dramatically in the past few years,” Koster said in a press release sent to Missourinet. “While Missouri’s No-Call list provides protection against unwanted calls from many in-state and national businesses, unfortunately, new technology is allowing callers from around the world to place literally millions of calls each day, anonymously, over the internet.”

Koster said these calls over the internet cost virtually nothing for the caller to place. He said these callers also utilize “spoofing,” or fake caller ID information, to make it harder to trace where the calls are originating. The callers often are random-dialing millions of numbers, looking for working phone numbers so they can try to sell a product or perpetrate a scam against the person answering the phone.

Koster’s office works with the Federal Trade Commission and other states to try to track down the illegitimate calls. Missouri also provides information to the Federal Trade Commission for cases in which our state does not have jurisdiction. As a result, the commission was recently able to shut down Pacific Telecom, a telemarketer operating out of Belize that Koster says preyed on people in Missouri and other states.

Complaints about telemarketers targeting cell phone numbers have also increased, Koster’s office reports. Consumers are now able to register cell phones on Missouri’s No-Call list due to a 2012 change in the law.

Below are the top 10 complaints filed with the Attorney General’s Office in 2012:

NO-CALL COMPLAINTS (39,990) – On average, consumers filed 212 complaints each working day, double the amount from two years ago.  The Attorney General’s Office asks consumers to report unwanted calls to the No-Call complaint hotline at 1-866-buzzoff (1-866-289-9633).

DEBT COLLECTORS (1,769) – State and federal laws protect consumers from harassment.  Consumers who believe they are being harassed should report the behavior to the Attorney General’s Office.

MORTGAGE/FORECLOSURE/LOAN MODIFICATIONS (1,648) – Many struggling homeowners have filed complaints concerning foreclosures and difficulties with the loan modification process.  The National Mortgage Settlement provides $25 billion in relief to homeowners whose loans are with the five settling banks: Bank of America, Citigroup, JPMorgan Chase, Wells Fargo, and Ally Financial.  Consumers should report any concerns that the terms of the settlement are not being met to the Attorney General’s Office.

MAIL AND PHONE SOLICITATIONS (1,432) – Consumers continue to be inundated with mail, emails and telephone calls offering them “valuable prizes.”  Often, the mail looks official, as if it is from a government agency.  Instead, these are scams designed to entice consumers to give out their financial information or to send money.  Foreign lottery promotions are the largest type of sweepstakes scams that affect consumers nationwide.  Consumers should not give financial information to people they do not know or wire money to strangers.  Any consumer who is not sure whether an offer is legitimate should call the Attorney General’s Office before taking action.

TELPHONE CRAMMING and BILLING (1,165) – Cramming happens when a consumer receives charges on phone bills for services not ordered; often the charges are by third parties.  To detect cramming, consumers should thoroughly review their phone bills. Consumers who notice unwarranted charges should contact their phone service carrier to request that unauthorized charges be removed and that they receive a refund.

CREDIT AND DEBIT CARD (1,165) – Complaints involved both charges that the consumer never authorized and double-billing on the card or account after making a purchase.  The Attorney General recommends that consumers be wary of authorizing direct bank account debiting and not to provide bank account numbers over the phone.  Using a credit card does provide some protection under federal law granting consumers the right to challenge unauthorized charges, but this must generally be done in writing within 60 days of the charge appearing on the consumer’s monthly statement.  Even so, consumers are encouraged to provide credit card information only to familiar merchants contacted by the consumer.

HOME REPAIR AND REMODELING (928) – Typical home-repair scammers go door-to-door, offering to do work but asking for money up-front.  The majority of door-to-door schemes involved asphalt driveway scams, roof and chimney repairs, and remodeling work inside the home, often following storms.  Many home-repair scam artists are not licensed, are not from the area, do not provide a detailed contract, and usually demand cash payments.

PUBLICATIONS AND MAGAZINE SALES (823) – In 2012, the Attorney General’s Office saw an increase in this category of consumer complaints.  In some complaints, telemarketing companies offered new subscriptions or renewals at discounted rates, or with the promise of a prize, but once the telemarketer had the consumer’s credit card information it charged inflated rates or failed to provide the magazines.  Other complaints involved door-to-door sales people who claimed to be raising money for college, camp, or charity, but then never received the publication. Concerned consumers should check directly with the school or charity to see if sales are being conducted in the area at that time.

CABLE/SATELLITE SERVICES (670) – Complaints to the Attorney General’s Office ranged from complaints about installation and price discrepancies to channel selections.  Consumers should be cautious when ordering a new service, and should always read the fine print.

AUTOMOBILE REPAIR (641) – While most repair shops are honest, it is very easy for an unethical mechanic to convince car owners that unnecessary repairs are needed.  The Attorney General advises consumers to get a written estimate before repairs are made, have repairs made by a certified mechanic, and verify that the business honors existing warranties and guarantees repairs.

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.”

St. Louis Business Journal, March 22, 2013

Editor:

I beg to differ with your editorial regarding Ameren Missouri’s bill before the General Assembly this year asking for a new surcharge that would let it get more money faster from customers to build new facilities.

Missouri has benefited from a fair ratemaking process for many decades. In a regular rate case, all financial aspects of a utility — its revenues and expenses — are examined to determine a rate increase and a return on equity. One way to look at the rationality of the system is to note that over time, the Public Service Commission has tended to grant a utility about half the rate it asks for. But, in recent years, with term limits rotating legislators unschooled in the complexities of utility law and regulation through the Capitol, the proverbial level playing field has begun to slant steeply upward, away from consumers.

In 2005 the utilities convinced the Legislature to let them add special issue surcharges to customers’ bills. As a result, in the past five years Ameren’s customers have seen their rates rise 43 percent from four rate cases and the regular imposition of a fuel surcharge. This spanned the entire recession, when Missouri’s families struggled with job losses and underemployment and many businesses wrestled with staying afloat. Meanwhile, Ameren was granted a profit of around 10 percent. The surcharge Ameren seeks is far more expansive than that allowed water and gas utilities.

Now it comes to light that last year Ameren exceeded its allowable profit by $80 million. At the same time, the company began arguing that it needs to shift the risk for building new projects to customers by levying a surcharge.
At no time during the rate case that concluded in December did the company present a list of capital projects that it couldn’t afford to build. Quite the opposite. Its CEO testified under oath that the company had no capital projects it needed to pursue immediately to provide safe and adequate service.

But in January it came to the General Assembly, surcharge bill in hand. Under Ameren’s proposal, Senate Bill 207 and House Bill 398, rates would no longer be given a thorough audit before increasing. What consumer protections that remain would be bypassed; no longer could we expect the Public Service Commission to scrutinize rates and reduce unreasonable and questionable expenses. Rates would essentially be put on autopilot.

Your editorial presents a misreading of the PSC analysis. In fact, Ameren Missouri customers would pay $40 million more in the first year of an infrastructure surcharge. And, as pointed out by the state’s official consumer watchdog, the Office of the Public Counsel, the surcharge would automatically rise each year after.

Yes, it is in the self-interest of consumer groups to oppose Ameren’s grab for fast cash. Those consumers are millions of Missouri households straining under financial pressures, as well as Missouri businesses who aren’t rebounding from the recession, while Ameren gives its CEO a 9 percent increase in his compensation.

Joan Bray, Board President, Consumers Council of Missouri

Op ed reprinted from the St. Louis Post Dispatch, August 7, 2012    

By Ed Weisbart, M.D.

Nearly 300,000 more Missourians could soon get access to health care if Missouri state officials decide to provide it.

Unfortunately, recent comments by the state Legislature’s leadership cause us to believe that they seem poised to deprive Missourians of this basic human right.
We, members of the Consumers Council of Missouri, urge the public to consider this decision carefully and act in the best interest of our friends, families and neighbors. Missourians must insist that members of the House and Senate and Gov. Jay Nixon not tolerate avoidable human suffering. As stewards of health care for hundreds of thousand of poor Missourians, these state officials should increase the role of Medicaid in the manner spelled out by the Affordable Care Act.

It’s humane and compassionate and it makes economic sense for Missouri consumers.

The Missouri Foundation for Health recently determined that over the next five years, the ACA would pump $8 billion into Missouri to expand health care to the 300,000 people. The state would be responsible for only $400 million, a small amount in comparison. If policymakers are inclined to think that 5 percent responsibility is too steep for Missouri, they should appreciate that the $8 billion will primarily become taxable income for health care providers (that’s jobs, jobs, jobs). No matter how you do the math, it’s going to cost the state very little to save a bunch of lives and provide health care for hundreds of thousands of Missourians.

Compound that with the fact that each of us in Missouri already pays for the health care of these 300,000 uninsured members of our community. Who else pays when someone without insurance goes to a hospital with a heart attack or stroke? Long ago, we as a society decided that a hospital couldn’t turn away someone who is desperately ill. If the patient doesn’t pay, guess who does? Each of us. The hospital writes it off, but it does so by charging those of us who have insurance a bit more.

We need to take full advantage of the value the ACA brings to Missouri consumers, even though it is not the legislation we believe would benefit Americans the most. The biggest problem with the ACA is that it preserves the dominant role of the private insurance industry in health care. With private insurance involved, for every dollar spent in the health care system, 31 cents pays for administration, profits and overhead. Instead of paying for actual health care, our premium dollars pay for those employees whose job it is to tell policyholders that we can’t get the health care we need, or to call doctors to explain that a prescription the doctor wrote isn’t the insurance company’s “preferred” prescription.

The Consumers Council of Missouri believes that consumers would best be served by fixing Medicare and providing it to all Americans. The ACA failed to do that. But it was enacted with the promise that it would create affordable insurance coverage for roughly half of today’s uninsured Americans. And much of that happens by expanding Medicaid and requiring the states to pick up less than five percent of the tab.

By taking advantage of the ACA and providing health care to at least a portion of uninsured Missourians through the Medicaid expansion, the state would let the federal government purchase, for example, a bottle of pills to treat high blood pressure. Our state’s leaders appear to prefer to let patients suffer, get overwhelmed by a massive illness, declare bankruptcy and wind up costing each of us plenty more than it would cost to expand Medicaid under the ACA.

Where is the fiscal prudence in this strategy? Where is the justice for the consumers who are rationed out of health care? Where are the moral ethics that should guide our state’s political discussions? Where are the hearts and minds of anyone who could oppose providing the basic human right to health care?

We urge the members of the Legislature and the governor to choose access for more health care consumers in Missouri and financial prudence for the state coffers by expanding Medicaid under the ACA.
Tomorrow, improved Medicare for all. Today, let’s at least take full advantage of the law and save some lives.

Dr. Ed Weisbart is a board member of the Consumers Council of Missouri and chairman of Physicians for a National Health Program-St. Louis.