EDITORIAL: Lawmakers make it easier for monopolies to raise electricity and gas rates

Tuesday , February 13, 2018 - 3:56 PM

St. Louis Post-Dispatch

Warner L. Baxter had barely taken his seat in the CEO’s chair at Ameren Corp. in 2014 before he promised to be “relentless” in pursuing regulatory relief in Missouri. It took him four years, capped by legislative opponents’ extraordinary 24-hour filibuster in the state Senate, but last week he took a big step closer to his goal.

The Senate, which annually has blocked Ameren Missouri’s attempts to ease its regulatory burden, gave in this time. A 27-hour power play orchestrated by GOP leaders overcame 24 hours of nonstop talking by three Republican opponents and one Democrat, and the Senate approved Senate Bill 564 shortly before 10 p.m. Thursday. The House is expected to go along without the drama.

Ameren calls it a “grid modernization bill,” saying it provides faster returns on investments in system upgrades. Sen. Doug Libla, R-Poplar Bluff, was skeptical, saying it was less about grid modernization than “bank account maximization.”

Labor interests had quietly urged Democrats to vote for the bill, believing that most of the 3,000 jobs that Ameren has promised will go to union members. Most Senate Democrats appeared to comply. But the measure was passed on a voice vote, freeing senators from defending a recorded vote on a bill that will surely raise electricity rates — and natural gas rates, too.

Spire Inc., the gas company formerly known as Laclede, piggybacked on the Ameren bill. Spire, too, will be able to recover plant operation and depreciation costs without having to endure a full rate case before the Public Service Commission. Gas companies already are allowed to automatically pass along certain infrastructure costs. SB 564 grants Ameren and the state’s two other regulated electric companies a faster way to recover infrastructure spending.

In return for having its regulatory burden eased, Ameren agreed to cap rate increases for five years at no more than 2.85 percent a year. After five years, Ameren can seek the PSC’s approval to renew the deal for another five years.

Ameren also agreed to return to customers about $100 million in tax savings it expects from the federal tax-cut bill within 90 days of SB 564’s final passage. Ameren had argued it couldn’t return tax savings without a lengthy PSC rate case, though the Legislature could have authorized a shortcut.

SB 564 is far less ambitious than deregulation bills that Ameren has proposed in the past, “I don’t think it is so bad that it’s horrible,” said Sen. Rob Schaaf, R-St. Joseph, who opposed it.

Still, for the first time, the PSC’s power to regulate what are, after all, profitable and reliable monopolies has been broached. A relentless company may want another bite of the apple.

“Will this be enough for them?” Schaaf asked. “Good luck, fellow senators, dealing with this again next year.”

Copyright St. Louis Post-Dispatch. Reprinted with permission.

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