The Missouri House of Representatives is scheduled to debate a bill Monday that customer advocates say could drastically raise utility bills.
Senate Bill 4, sponsored by state Sen. Mike Cierpiot (R-Lee’s Summit), could afford utilities in Missouri a variety of new financial accounting practices. It is set to be debated and voted on in a hearing of the House Utilities Committee.
The legislation includes a rate-making policy called “future test year” that would allow water and gas utility companies to charge customers based on estimates on future expenses instead of accrued costs.
It also includes a policy called “construction work in progress” or CWIP, that enables energy companies to earn revenue on power plants as they build them and before they generate any electricity.
John Coffman is an attorney with the Consumers Council of Missouri, a consumer advocacy group. The organization estimates SB 4, if passed, would result in an additional $1,115 for the average customers’ utility bill each year and $5,000 in the next decade if a nuclear power plant is built under CWIP.
“What you're really asking customers to do is to give the utility $5,000 — and that includes profit, that includes rate of return to the utility, and there's still no guarantee that the project is even going to be completed,” Coffman said.
In a news release, Consumers Council executive director Sandra Padgett said these policies, which the Missouri Senate has already passed, would affect energy burdened Missourians — those who spend a disproportionate amount of their household income on utility bills.
“Energy burden in Missouri disproportionally affects people who are Black and Brown and people who have low income,” Padgett said. “The Senate's approval of SB 4 is not only shocking but also endangers the health of Missourians who are struggling to make ends meet.”
In a news release, the Sierra Club accused the Missouri House of Representatives of bypassing “its democratic role in the legislative process to do the bidding of the state’s monopoly electric utilities” by holding a hearing and a vote on the bill on the same day.
“Lawmakers are undermining the democratic process to rush Senate Bill 4 through the legislative process because it guts long standing consumer protections while massively increasing utility bills and fossil fuel pollution. This is an insane abuse of power and the democratic process, and Missourians deserve better,” Gretchen Waddell Barwick, Missouri chapter director for the Sierra Club, said in the release.
Tim Opitz is the executive director and counsel for the Midwest Energy Consumers Group, a coalition of commercial and industrial businesses that tend to consume sizable quantities of energy.
“When you're a large user and you're spending tens of millions of dollars on your electricity, you've got an interest on the front end ... trying to look closely at what the utility is asking for,” Opitz said.
Members of the Midwest Energy Consumers Group are in-state branches of mostly national companies, such as Walmart.
Opitz said when he’s speaking with lawmakers and representing clients before the Missouri Public Service Commission — the state agency that regulates utility prices — he’s advocating for the cost of service.
“I understand that costs go up,” he said. “We want to look at it and say, ‘All right, what does it cost you to provide this service?’ We'll pay that but we don't want to pay more than what it costs to provide service.”
When utilities want to recoup costs through customer bills, the companies must present their cases to the Public Service Commission. The companies file information on what it costs to provide service, make new investments and maintain infrastructure including power plants, substations and transmission lines.
Organizations like the Midwest Energy Consumers Group, the Consumers Council of Missouri, the Sierra Club and more have the chance to “intervene” in the rate case, which gives the groups an opportunity scrutinize the records and make their own proposal on prices.
“We don't want to pay early, as would be the case with future test year legislation or construction work in progress legislation that would require customers to pay in advance for some of these projects,” Opitz said.
He predicts that if SB 4 becomes law utilities will ask for rate increases of 15-20%.
“Costs are going up in all aspects of people's lives and businesses’ operations,” he said. “It's crazy to me that we are handing these monopolies money above and beyond the cost of service to do things that they should be doing already.”
