Legislative War on Utilities

JEFFERSON CITY — Never have household checkbooks had so much to fear from Jefferson City politicians. Since Missouri elected a new governor and several new legislators this past November, utility lobbyists have been drafting up new schemes to squeeze ever more dollars from unsuspecting utility consumers. Over 100 utility lobbyists have registered with the Missouri Ethics Commission, including many former legislators, as well as former Public Service Commission (PSC) commissioners.

It is not news is that utility companies are trying to find ways to bypass the PSC and pass rate increases through surcharges and other complicated mechanisms—such proposals are an every year event. What is new this year is the increasing number of proposals and the increasingly frantic pressure being applied by utility lobbyists and affiliated organizations for a “fix” to the PSC process with absolutely no evidence of a problem.

Missouri lawmakers have been generally cautious in the past about these repeated attempts to shift the business risk of monopolies onto the backs of captive ratepayers. Few of those proposals in the past ever became law. Missouri has thankfully avoided many of the legislative mistakes bordering states made in adopting utility proposals to change their rate-setting laws, adding such methods as Construction-Work-In-Progress and Formula Rates. Those states are now left debating bailouts for big power plants that are having trouble surviving the current energy marketplace, or forcing ratepayers to pay for other bad utility investments.

What has does that mean for Missouri? On average, Missouri electric rates are currently among the lowest in the Midwest. This is an incredible benefit for our state economy. But this could be wiped away entirely by legislation currently pending in the State Legislature.

So what needs to be fixed: profits? The biggest monopolies here in Missouri–Ameren Missouri, KCPL, Laclede Gas (Spire), and Missouri-American Water Company—have been making very generous profits, enjoying increasing dividends, as well as soaring stocks prices.

Reliability? Both Ameren Missouri and KCPL currently have the some of the highest electric reliability data in the Midwest. Low rates, high reliability, and profitable utilities. What is wrong with this picture that needs to be “fixed”?

Nonetheless, more than a dozen pending measures that would increase regulated utility rates have already passed out of utility-friendly committees so far this 2017 legislative session. Here are just some of the pending proposals that have the potential to add up to significant sums of money on top of current household utility bills:

Electric Ratemaking Legislation Rewrite
Senate Bill 190
– (Sen. Ed Emery and Sen. Jamilah Nasheed); House Bill 628– (Rep. Rocky Miller). This sweeping legislation would make numerous changes to the current ratemaking system, causing rates to rise faster and increase higher for the same level of service, costing Missourians hundreds of millions. To make matters worse, this legislation includes lower rate for one company: Doe Run, subsidizing their rates by rate increases on ordinary households.

Water Utility Decoupling Profits from Usage
Senate Bill 184
– (Sen Ed Emery); House Bill 243 (Rep. Charlie Davis).This legislation would allow water companies to automatically increase water rates annually to cover losses from decreased consumer usage that could result from abnormal weather, an economic downturn, or other disaster. Ratepayers would essentially have to guarantee profits, shielding a for-profit company from decreased profits.

Other legislation that would raise utility rates include formula rate bills for Natural Gas Companies: SB 242 – (Sen Ed Emery) and House Bill 747 (Rep. Rocky Miller); Performance Based Rates creating automatic, allowing for 5-year pre-approval plans for electric companies SB 214 – (Sen. Ed Emery); and a New Surcharge Authorization bill, that would open the door to unlimited new surcharges HB 997 — (Rep. Rocky Miller).

But consumers have some hope. A few legislators have been bravely standing up for consumers. “Sen. Gary Romine, Sen. Doug Libla, and Sen. Jill Schupp represent a few brave voices speaking up against a torrent of utility propaganda.” says John Coffman, utility counsel for Consumers Council of Missouri.

“It’s Not the Grid; It’s the Greed” has been the rallying cry of this legislative bulwark against numerous utility rip-off schemes. Unfortunately, many more state legislators are working with the utilities to make changes that would raise utility rates.[1] Meanwhile, Missouri has too many other serious problems for our State Legislature to waste precious time figuring out how to increase utility profits.”

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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:

•  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.

•  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.

•  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.

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

•  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.

•  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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Get Past Missouri Legislature’s Healthcare Roadblocks

St. Louis Post-Dispatch, October 9, 2013

By Joan Bray, Executive Director of Consumers Council of Missouri

Nearly 500,000 uninsured Missourians got the opportunity, beginning last week, to do something extraordinary — get health insurance through the Affordable Care Act. Now they can add security and comfort to their lives, knowing they finally have medical care they can afford.

And they will get it at reasonable cost because individuals and families earning incomes up to 400 percent of poverty will be assisted by subsidies or tax credits. Consumers can go to www.healthcare.gov, click through to Missouri, choose from among 17 insurance plans and determine the cost to their budgets.

Unfortunately, opponents of the ACA in Missouri’s Legislature have spent the past three years obstructing this opportunity.

In August 2010, the Legislature put Proposition C on the ballot, aimed at Missourians opting out of a major requirement of the federal law — obtain insurance or pay a penalty. The measure passed, but the outcome was only symbolic because federal law generally trumps state law. The result serves primarily to cloud the atmosphere.

In November 2012, Proposition E became law, largely barring state workers from assisting Missourians in taking advantage of the ACA and making them liable for lawsuits if they do. The federal law establishes a marketplace in each state, an online destination where consumers compare insurance options in plain language. Prop E decreed that no state employee may participate in designing or implementing the marketplace unless it has been established in Missouri law — which the Legislature refused to do.

As a result, nonprofit organizations such as the Missouri Foundation for Health and the Missouri Hospital Association are picking up the slack to provide enrollment assistance. They know that healthier Missourians are more productive and happier Missourians.

As if lawmakers hadn’t done enough damage through ballot measures, this past legislative session they passed another attempt to safeguard the state’s dubious distinctions of ranking 42nd in health status among the states and having the second-highest growth rate of uninsured people over the past 13 years.

The ACA provides for people and organizations, “navigators,” to help consumers choose and enroll in insurance plans. It makes sense. Selecting insurance is stressful, even for those who enroll annually under employer plans.

But Senate Bill 262 makes it difficult for navigators to function. The Missouri law:

• Imposes a fine on anyone who is unlicensed as a navigator but is helping someone find insurance in the marketplace. It requires private individuals who talk to other private individuals about insurance to either obtain a navigator license or pay a fine. This has a chilling effect on community and public interest organizations that are filling the gap in state involvement caused by Prop E.

• Bars navigators from providing advice about “the benefits, terms, and features” of a plan. So much for navigators being helpful. Such language prevents navigators from meeting the federal law’s requirements to “distribute fair and impartial information concerning enrollment in qualified health plans” and “facilitate selection of a qualified health plan.” But Missouri keeps a navigator from advising a consumer that one plan is better than another and disclosing plan details.

• Doesn’t allow navigators to tell consumers about plans or other insurance products not offered in the marketplace. Qualified health plans will also be sold outside the marketplace. But a navigator in Missouri has to pretend they don’t exist.

• Mandates that a navigator encountering a person who has insurance obtained from an insurance agent not advise that person but refer her instead to the private market.

A majority of the highly partisan Missouri Legislature has made the ACA much less attainable for the people they are sworn to serve, 13 percent of whom are uninsured. These lawmakers have spent the past three years demonizing and complicating the most socially beneficial federal legislation since Congress passed Medicare and Medicaid in 1965.

Missourians must draw on our deep-seated Midwestern grit and perseverance to get past the negative rhetoric and destructive policies calculated to diminish us before we can finally provide a healthier, happier future for ourselves and our families. We can do it.

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Health Insurance Marketplace Opens

As of Tuesday, October 1, 2013, uninsured Missourians have a new way to buy health insurance: the Health Insurance Marketplace.  The Marketplace is designed to help you find health insurance that fits your budget, with less hassle.

Make one application, one time, and you or your family can explore every qualified health insurance plan in your area of the state.  You may even be eligible for a zero dollar premium plan or a new kind of tax credit that lowers your monthly premium immediately. For consumer information, visit www.HealthCare.gov.  You can sign up for email and texts at www.HealthCare.gov/subscribe.  You may also call the Health Insurance Marketplace Call Center at 1-800-318-2596.  TTY users should call 1-855-889-4325.

Private companies will run plans in the new Marketplace, and every health insurance plan will cover a core set of benefits called essential health benefits. You’ll be able to compare your options based on price, benefits, quality and other important features.  New and expanded programs will be directly linked in, and more people than ever before will get a break on costs.  Make one Marketplace application, one time, and you’ll see all the programs you qualify for.

Your life and family are unique. Find health insurance that fits the way you live at the Health Insurance Marketplace, AND learn whether you can get a break on costs.  You can see what your premium, deductibles, and out-of-pocket costs will be before you decide to enroll.  You can make apples-to-apples comparisons of costs and coverage between health insurance plans.

When you shop at the Health Insurance Marketplace, everything you need is laid out for you.  Information about prices and benefits is written in practical terms you can understand, so you don’t have to guess about your costs. You get a clear picture of what you’re paying and what you’re getting before you make a choice.

Visit www.HealthCare.gov or call 1-800-318-2596.

Attorney General Warns of Fraud, Scams With Insurance Marketplace Launch 

Attorney General Chris Koster and the Missouri Hospital Association (MHA) are teaming up to educate Missourians about possible scams surrounding the new federal Health Insurance Exchange plans that begin enrollment on October 1st. As part of the Affordable Care Act, an insurance marketplace, commonly referred to as an exchange, will provide individuals with options for private health insurance coverage to comply with the law’s minimum essential coverage requirement.

“As with any new system, scam artists may prey upon consumers who are attempting to comply with the law,” said Koster. “My concern is that scammers will use the insurance coverage enrollment period opening on October 1 as an opportunity to commit fraud.”

Consumers seeking insurance coverage through the exchange will need to provide personal information in order to determine which plans are available to them and to sign up for health insurance coverage. Missouri Hospital Association President and CEO Herb Kuhn warns that scammers may attempt to con people into thinking that they are enrolling in a marketplace insurance plan when they are not.

“Scammers may trick consumers using phony websites, mailings, calls, or visits to the home,” said Kuhn. “We want Missourians to be on the lookout for fraudsters asking consumers to provide personal information or to take steps that are not actually required.”

Scammers could use personal information to commit financial identity theft, medical identity theft, or insurance identity theft. Financial identity theft is when a scam artist steals your information to access your accounts or to open a line of credit in your name. Medical identity theft happens when the scam artist gets medical treatment by using your information. Insurance identity theft is when someone uses your information to sign up for coverage.

In an attempt to prevent Missourians from becoming a victim of these types of identity theft, Koster and the MHA offer the following tips:

  • Beware of people asking for money to enroll you in the Marketplace, “Exchange,” or “Obamacare” insurance. Legitimate enrollment assisters will NOT ask for money. Especially be wary of anyone offering to sell Obamacare insurance cards. Scammers could try to sell you an insurance card without enrolling you in an insurance plan.
  • Check Credentials. Ask anyone who wants to help you enroll to verify their affiliation. In addition to your licensed insurance agent, there are two new types of licensed assistants who can also help you take the steps necessary to sign up: Certified Application Counselors and Insurance Navigators.  Certified Application Counselors are part of organizations, such as hospitals, that have been certified by the Center for Medicare & Medicaid Services.  Insurance Navigators are licensed with the Missouri Department of Insurance, Financial Institutions and Professional Registration (DIFP). For a list of navigators licensed by DIFP in Missouri visithttp://insurance.mo.gov/otherlicensees/navigators.php.  To learn whether the person assisting you is legitimate, call 1-800-318-2596, the number for the CMS Marketplace assistance.  It is available 24 hours a day, seven days a week. There are two Missouri websites that provide legitimate information only – enrollmissouri.org operated by the Missouri Hospital Association and covermissouri.org operated by the Missouri Foundation for Health.
  • Don’t be swayed by high-pressure visits, mail solicitations, e-mails, and phone calls from people pretending to work for the government. No one should threaten you with legal action if you do not sign up for a plan.
  • Always ask for identification if someone comes to your door.
  • Provide personal information only if you initiate the contact.  People who contact you seeking personal information may be trying to steal your identity. No one from the government will call or email you to sell you an insurance plan or ask for personal information. Be careful when giving out personal information, such as credit card, banking, or Social Security numbers.
  • Communicate directly with the Official Marketplace.  Unless you are using a licensed insurance agent or assistant, the only way to ensure that your personal data is not going to a scammer is to sign up using the official website at HealthCare.gov or by calling 1-800-318-2596. Avoid sham websites and look for official government seals, logos or website addresses. Look for internet sites with a .gov on the end of the website address.
  • Watch for “fake” products.  Some scammers will try to sell you a prescription card.  These can be phony.  Some appear to be real but are only discount cards and not really insurance.
  • Suspected fraud should be reported to the Federal Trade Commission through the Marketplace Call Center at 1-800-318-2596 or on FTC.gov/complaint. All suspected fraud should also be reported to the Attorney General’s Office online or 1-800-392-8222.

Koster said Missouri consumers should not hesitate to report anything suspicious because scams can only be stopped if law enforcement learns of them.

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CCM Joins CARS To Urge Enterprise To Drop Opposition To Rental Car Safety Bill

A loophole in federal law allows rental car companies to rent or sell vehicles that are under a safety recall, without fixing them first. Enterprise is the largest rental car company in the nation but admitted in a letter to the National Highway Traffic Safety Administrationm, that it continues to rent vehicles to the public, even after receiving notice they are under a safety recall.

Pending legislation, S 1445, sponsored by Sen.Schumer, Sen Boxer and others, would ground defective rental cars that are subject to a safety recall, until they are fixed. Enterprise is attempting to defeat the bill.

Senator Shumer proposed the legislation after sisters Raechel and Jacqueline Houck of Santa Cruz, CA were killed in 2004 when the Enterprise rental car they drove caught fire under the hood, they lost steering and veered across the median crashing head-on into a semi-trailer truck. Their car exploded on impact, killing them both. Enterprise received a safety recall notice from the manufacturer 30 days before the fatal crash but continued to rent the car to unsuspecting customers.

Consumers Council of Missouri urges concerned citizens to write to Andrew Taylor, CEO of Enterprise, urging him to drop opposition to S 1445. His address is: Andrew Taylor, Enterprise Corporate Office, 600 Corporate Park Drive, St. Louis, MO 63105.

NEWS RELEASE

NEWS for immediate release: Tuesday, February 21, 2012

Contact:
Judi Roman, Consumer Council of Missouri (St. Louis, MO) 314-647-7723
Rosemary Shahan, President CARS (Sacramento, CA) 530-759-9440

Enterprise Tries to Kill Rental Car Safety Bill Advocated by Rival Hertz and Consumer Groups

Enterprise Rental Car Co. is attempting to defeat federal auto safety legislation, despite a historic new compromise agreement struck between a rival rental car company Hertz and a non-profit auto safety organization. Hertz has agreed to support a federal requirement for rental car companies to ground defective rental cars that are subject to a safety recall, until they are fixed.

A major investigative report published today by USA Today, the nation’s largest-circulation daily newspaper, announced Hertz’ stand — unprecedented for a rental car company.

The agreement reached by Hertz and Consumers for Auto Reliability and Safety (CARS) is similar to legislation proposed by Senator Chuck Schumer (D-NY) and championed by Sen. Barbara Boxer (D-CA) that is pending in Congress. Thanks to Hertz’ decision to side with consumers, passage is now more likely, when Congress reconvenes. Under existing law, new car dealers are prohibited from selling recalled vehicles once they receive notice about a safety recall, until they are fixed. Auto manufacturers are required by law to pay for the repairs. However, a loophole in the law allows rental car companies to rent recalled vehicles to the public, without fixing the safety defects first.

Sen. Schumer named the proposed legislation in memory of sisters Raechel and Jacqueline Houck of Santa Cruz, CA, who were killed in 2004, at ages 24 and 20, when the Enterprise rental car their father arranged for them to rent, a PT Cruiser, caught fire under the hood. The car also lost its steering, veered across the median, and crashed head-on into a semi-trailer truck. The car exploded on impact, killing both sisters.

Enterprise received a safety recall notice from Chrysler about 30 days before the fatal crash, warning about a defective steering component that was prone to leaking, causing a risk of under-hood fires and a loss of steering control. But the company continued to rent the car to unsuspecting customers, including three other people before the Houck sisters. The sisters were led to believe they were getting an upgrade. In fact, the PT Cruiser was the last car on the lot. Later, their grieving parents happened to find out about the safety recall from a mechanic who worked with Mr. Houck at an auto dealership.

When the Houcks sued Enterprise, the company fought back, insisting that the young women must have been suicidal. It wasn’t until after five years of litigation that Enterprise finally admitted 100 percent liability — about two weeks before the case went to trial. This meant the jury never heard key evidence, including a statement from a former Enterprise manager that, “When demand called, we rented out recalled vehicles … If all you have are recalled vehicles on the lot, you rent them out. It was a given. The whole company did it. Enterprise’s corporate offices look the other way regarding this fact.”[1]

The jury awarded the Houcks $15 million — peanuts to the largest rental car company in the nation. Despite pressure from Enterprise, the Houcks refused to sign a confidentiality agreement, leaving them free to push for legislation to spare other families the same terrible loss.

Despite the Houcks’ tragedy, Enterprise has admitted to federal regulators that it continues to rent vehicles to the public after they are recalled by the manufacturer due to safety defects, without fixing them first. According to Enterprise, “A committee of senior executives of the parent company, including the executives responsible for vehicle maintenance and repair, evaluates recall notices. If the committee is confident that we can continue to safely rent the vehicle, we may rent the vehicle prior to the recall work being completed.”

Enterprise boasts that last year it took in over $14 billion. So it’s hard to believe they can’t afford to repair unsafe, recalled vehicles before renting them to the public,” said Rosemary Shahan, President of Consumers for Auto Reliability and Safety (CARS), a non-profit auto safety and consumer advocacy organization based in Sacramento, CA. “Particularly when Hertz is supporting the legislation, there’s no excuse for Enterprise to keep putting its customers at risk.” CARS negotiated the agreement with Hertz to support grounding the recalled cars.

“If this law had been in effect in 2004, my daughters would still be alive,” said Carol “Cally” Houck, Raechel and Jacqueline’s mother. “No one else should have to lose a child because the rental car company doesn’t care enough about their safety to ground a car they know is so unsafe it is being recalled.”

Enterprise also admitted that it ordered tens of thousands Impalas from General Motors that were missing standard side air bags. By cutting corners on safety, they shaved approximately $145 off the price of each car. Side air bags have been proven to dramatically reduce the risk of serious injuries or fatalities from side impact collisions. Enterprise then resold the vehicles as used cars, claiming they had side air bags. In order to settle a class action brought on behalf of used car buyers who purchased the cars, Enterprise offered to give the owners a $200 discount.

“I hope Enterprise will put its customers’ safety first, by throwing its full support behind the legislation advocated by Senators Schumer and Boxer,” said Joan Bray, chair of the Consumers Council of Missouri. “Enterprise is a key member of Missouri’s corporate community and we expect it to behave in a responsible and ethical manner.”


[1] Statement of Mark Matias, former Enterprise manager, 2008.

[2] Letter from Enterprise Holdings to Jennifer Timian, Esq., Chief, Recall Management Division, Office of Defects Investigation, National Highway Traffic Safety Administration, April 7, 2011, Page 2.

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