Editorial Urges Veto of Gas Surcharge Bill

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

The Utility Handouts

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

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

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

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