The Missouri Senate passed a bill Monday revising key aspects of utility rates, including allowing utility companies to seek rate increases based on projected costs rather than actual costs.
The bill, which passed on a 22-11 vote, allows for companies to seek rate increases that include construction work in progress on natural gas units. It also allows for Missourians to opt out of using smart meters, among other provisions.
For utility companies, a test year is a 12-month period used to decide the future cost of service. Currently, Missouri utility companies use a historical test year that bases utility rates on expenses, investments and sales from a recent 12-month period to determine the future rates.
Senate Bill 4 gives gas, water and some sewage utility companies the option to use future test years, which would base rate requests on projected expenses and revenue. The Public Service Commission can stop a company from using future test years if it’s determined harmful to public interest, according to the bill.
The bill faced opposition from both Democrats and Republicans, who stalled the final vote for several hours to voice concerns that it was rushed through the legislature and would result in substantial utility rate increases.
“I haven’t found anybody that knows everything about this bill,” said Sen. Joe Nicola, R-Grain Valley, who voted against the bill. “I wish we’d have taken a little more time, maybe even had some town halls across the state and press conferences, so that we can explain to the people what the problem is.”
The Senate did not pass an emergency clause that would put the bill into immediate effect if it gains a final passage.
The bill now moves to the Missouri House for further debate.
