A lack of consumer protection clauses in Callaway legislation worries some senators
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A lack of consumer protection clauses in Callaway legislation worries some senators

Date: February 10, 2009
By: Emily Coleman
State Capitol Bureau

JEFFERSON CITY - The CEO of AmerenUE warned legislators that the company will walk away from the second Callaway plant if Missouri does not ease restrictions on its utility rates.

While Ameren supports a bill, sponsored by Sen. Delbert Scott, R-Lowry City, that would allow them to recuperate the financial costs incurred, some of their largest consumers - including their single largest consumer Noranda Aluminum - voiced their opposition during a Senate commerce committee hearing.

"We need rate relief, not rate increases," said Kip Smith, the president and CEO of Noranda, which dedicates one third of its budget to energy expenses. 

Sen. Kurt Schaeffer, R-Columbia, was among those who expressed their support for the Callaway 2 project.  He said, "I think this could be the cornerstone of energy independence in Missouri for the next 50 years."

However, he did express a variety of concerns over the bill, especially a lack of consumer protection clauses and the shortening of the period given to deem costs imprudent.

"There's basically no consumer protection in this bill at all for residential or industrial rate payers, and I think that's especially true if this plant is started and never finished," Schaeffer said.  "In fact the language as I read it if the plant is approved yet the project is abandoned not only is there no mechanism to refund to rate payers the investment they've made but you can actually continue to charge them the remainder of the project.  I just don't think that's fundamentally fair."

Any rate increases would still have to be approved by the Public Service Commission like they are now, but the bill would limit the period of a time in which a review of a company's construction spending could take place.

"(This bill is) essentially a utility wish list," said Lewis Mills of the Public Counsel, which represents the interests of utility consumers in rate cases before the commission.

Ameren and Noranda representatives were among the 35 witnesses that spoke at the hearing.  The complexity of the issue made Lager warn early on that the issue may take longer than this legislative session to resolve.

"It's very reasonable to assume and understand that this is going to be a multiple year process," said Sen. Brad Lager, R-Maryville.  "And I think that to believe that we're going to be able to do it all in one year is maybe wishful at best."

According to the hour-long testimony of the Ameren delegation, the permit process may not be completed for three to four years, but they said their acquisition of federal loans requires the certainty the legislation would provide.

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