Electric company leaders support bill allowing them to charge more on utility bills
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Electric company leaders support bill allowing them to charge more on utility bills

Date: February 27, 2013
By: Taylor Beck
State Capitol Bureau
Links: HB 398

JEFFERSON CITY - Officials from three of Missouri's largest electric companies urged lawmakers to pass a bill which would make it easier for the companies to raise utility bills.

The bill would allow the companies to charge ratepayers for infrastructure costs through a surcharge. The surcharge would fund electrical plant repairs as well as projects to comply with environmental and safety regulations.

Supporters from Missouri's biggest electric companies spoke in front of the House Utilities Committee Wednesday. Representatives from Kansas City Power & Light, Ameren Missouri and Empire District Electric Co. said the bill would create jobs and improve services and reliability for consumers.

The surcharge would increase utility bills, but supporters said consumers would have to pay for the infrastructure regardless, whether through rate increases or the surcharge. The only difference is the time they pay it.

Warner Baxter, president and CEO of Ameren Missouri, said Missouri is behind in infrastructure in comparison to the rest of the country and this surcharge is essential to help utility companies get up to speed.

"As providers of a service which is so critical to not just our every day lives but certainly businesses as well as the economic future here in the state of Missouri, we need to keep up our investment," Baxter said.

But Rep. Todd Richardson, R-Poplar Bluff, said he thinks the companies already do a good job of providing reliable service and he would need to see a stronger justification for the new funding.

“In the absence of a problem I’m not sure why we’re finding a solution,” Richardson said.

Though supporters noted a job creation element of the bill, opponent Steve Spinner, chairman of the Missouri Industrial Energy Consumers,  presented a study that said just the opposite. His organization represents companies such as Anheuser-Busch, Monsanto and Purina. The study stated an increase in utility prices will kill more jobs than infrastructure projects create.

Representatives questioned the study for at least an hour in Wednesday's hearing.

"Whenever I see numbers I start getting suspicious because numbers can do things, they can be magical sometimes," said Rep. Clem Smith, D-Velda Village Hills.

Under current law utility companies have to go through the Public Service Commission to increase rates to pay for infrastructure and other additional expenses. This process can take months. They said this bill fixes that regulatory lag and allows utility companies to invest faster while interest rates are low. Supporters said this will give the companies better credit ratings, which could make utilities cheaper in the long run and make infrastructure projects more attractive to investors.

However, opponents said the surcharge gives utility companies too much power above the commission. Spinner said it allowed the companies to avoid the commission's oversight.

"They remove the incentive to operate the entire organization as efficiently and cost effectively as possible," Spinner said.

Committee chairman Rep. Doug Funderburk, R-St. Peters, said he plans on hearing the bill further next week and hopes to vote on the bill next Wednesday.