Utility Bill Just a Back-door Tax Increase

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.

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