Bill loosening rules for Missouri electric rates speeding toward passage
A bill changing how utility rates are set won overwhelming approval in a Missouri House committee Monday after a hearing where backers said it is vital to the state's economy and opponents said it would soak consumers with higher costs.
The proposal to repeal a 1976 law passed by initiative petition that prohibits companies from charging for power plants under construction but not yet operating has already passed the state Senate. Following the 17-4 vote Monday in the House Utilities Committee, it could go directly to Gov. Mike Kehoe if nothing is changed during the upcoming debate in the full House.
The legislation would allow companies to seek rate increases for 'construction work in progress,' or CWIP, with a specific allowance for new generating plants that burn natural gas and an allowance in another section for any generating plant that is an approved resource plan.
The initiative that passed the 1976 law was launched by people upset over rate hikes allowed for the construction of a nuclear power plant in Callaway County.
The bill repeals the ban for 10 years and allows the Public Service Commission to extend it for another 10. State Sen. Mike Cierpiot, the Republican from Lee's Summit who is sponsoring the bill, said he doubts the new CWIP allowance would be used for a new nuclear power plant.
'I was asked to have nuclear CWIP this bill, and I actually don't think that's a horrible idea, but I think it's kind of 15 years off before we actually start deploying those,' Cierpiot said.
Massive utility legislation expected to boost Missouri power generation — and energy bills
In the Monday vote, two of the committee's seven Democratic members supported the legislation along with 15 of 16 Republicans, while three Democrats and one Republican were opposed.
During two hours of testimony, opponents argued the CWIP provisions, when coupled with other allowances for utilities to seek more from customers, would add as much as $1,100 a year to residential electric bills.
'This bill is not designed to benefit Missourians,' said Gretchen Barwick, director of the Missouri chapter of the Sierra Club. 'It's designed to provide corporate welfare to monopoly utilities.'
Representatives of utilities and the Public Service Commission said growing power demands mean new generation plants will be built in the Midwest. Passing the law allowing the charge for construction of new plants will be an incentive to build in Missouri, they said.
Large industrial users of electricity will locate plants where power is plentiful, said Jason Klindt, senior director of external affairs at Evergy. The bill includes requirements that large users pay a rate that is not subsidized by residential users, he said, arguing that will spread the cost out and result in lower overall rates for everyone.
Evergy is the major power provider for western Missouri. It is building two new gas-fired power plants in Kansas. The company would like to build in Missouri as well, Klindt said.
'We look forward, frankly, to announcing new power plants if we can get this bill across the finish line,' he said.
The bill would apply to investor-owned utilities regulated by the PSC. The commission has no control over rates for municipal power companies or rural electric cooperatives.
The bill would also allow all utilities regulated by the commission — water, gas and sewer along with electricity — to seek rates based on what the bill calls a 'future test year.'
Currently, rates are set after the PSC examines the actual costs incurred to deliver service and determines if each expense was prudent and necessary. In a future test year scenario, the utility would outline what it expects to spend and the costs would be pre-approved by the PSC.
There are some aspects of the bill intended to benefit consumers. The Office of Public Counsel, which represents the interests of ratepayers in utility cases, would receive dedicated funding for the first time from an assessment on utility revenues.
There are changes to the rule blocking shutoffs for non-payment during hot and cold months as well as provisions requiring the commission to account for any federal tax savings by adjusting rates.
The bill would also allow the PSC to order electric utilities to repay customers for construction work in progress charges if the plant does not go into service.
The time is now for CWIP because of a rapidly escalating demand for power, said Rich Germinder, policy and strategic initiatives advisor to the PSC. The rapid increase in the number of electric vehicles and the construction of power-hungry data centers is helping drive up demand.
'Everyone was caught unprepared for the demands of the increased load growth that we're seeing,' Germinder said.
Opponents of the bill said the items intended to help consumers won't offset the additional costs.
All three of Missouri's major electric suppliers are before the commission seeking rate increases. Evergy is seeking a rate increase to boost revenues by 14%, Ameren, which serves eastern Missouri, is seeking a rate increase of nearly 16% and the Empire District Electric Company, which serves many smaller communities doing business as Liberty, wants regulators to increase its revenue by nearly 30%.
The CWIP and future test year provisions will just add to the additional costs consumers already face, opponents said.
If this legislation passes, it will be the most costly and expensive legislation ever passed by the Missouri legislature,' said Diana Plescia, attorney for the Missouri Industrial Energy Consumers, a consortium of 14 major manufacturers.
The legislation will increase rates by an additional 40- to 80%, she said, making it too expensive to attract new investment.
'The damage to our economic base in Missouri will be real,' Plescia said 'And I say this in terms of both the jobs that will be lost and the jobs that will never come.'
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'He has really led that shift towards a more populist Republican Party,' said a GOP operative who has worked with Hawley's team. 'Obviously, the president played a big role in a lot of the economic populism, and the senator has been in line with the president on that.' But Hawley was soon written off by Democrats, and some Republicans, after the Jan. 6, 2021, attack, when he was seen entering the Capitol raising a fist to protesters assembled outside and later moved forward with his objection to the electoral vote count. Still, Hawley has managed to overcome the objections. When he was asked last month about his vote to confirm a former top Hawley aide to a lifetime judicial post in Missouri, Sen. Angus King, I-Maine, admitted to a reporter that he made 'a mistake,' given the nominee's anti-abortion rights record, but said, 'I took Josh Hawley's advice.' Blumenthal said in an interview: 'Well, Jan. 6 remains in the back of a lot of people's minds. At the same time, on issues where we can make progress stopping corporate greed or monopolistic control over markets, there's a need for allies. The iconic Jan. 6 photo of him with a fist in the air can't be erased from memory. But if he can bring Republican support to the table for ideas that will help people, sometimes working together makes sense.' Blumenthal said that while he and Hawley maintain vehement disagreements on many issues, he praised Hawley as 'distinctive' for his willingness 'to think outside the usual Republican comfort zone.' 'Frankly, he is an extremely good partner. He's very smart and insightful. We vote differently most of the time. In fact, probably the vast majority of our votes are different. But he is a public official who seeks common ground, especially on technology issues where privacy and individual rights are at stake,' Blumenthal said, adding: 'He is regarded as open to new ideas, to kind of forge his own path. He seems to be pretty independent-minded on a number of issues.' Hawley's style has allowed him to carve out a unique space in Congress. Sean O'Brien, the general president of the International Brotherhood of Teamsters, said Hawley was the first Republican his union 'actually formed a relationship with.' O'Brien would later offer praise to Hawley during a speech before the Republican National Convention last summer, an unheard-of appearance for a major labor union leader. 'We've worked on many issues,' O'Brien said, adding he had no sense of whether Hawley would pursue the White House in 2028. 'Look, there's nobody more prepared,' O'Brien continued. 'If you watch these hearings, whether someone likes Josh Hawley, they don't like Josh Hawley, you can't deny the fact that he is prepared and he does not discriminate against anybody, and he strictly follows a moral compass that's in the best interest of the American people. And look, I'm a huge fan.' Hawley also raised eyebrows within his own party when he slammed the Medicaid cuts in Trump's 'big, beautiful bill' — which he voted in favor of after having secured some concessions. Shortly after Trump signed the legislation into law, Hawley held an event in Missouri to tout it, namely its inclusion of the Radiation Exposure Compensation Act, which provides cash benefits to victims who have suffered serious ailments because of radiation exposure. A person familiar with conversations between Hawley and the administration said Hawley 'pressured' the White House to include the fund in the megabill 'so he would stop trashing the bill.' Hawley said in an interview at the event that members have 'got to take the wins that you can,' adding that including the Radiation Exposure Compensation Act 'was key to my vote.' But if Hawley's criticisms of the legislation have subsided, they did not entirely vanish. Less than two weeks after Trump signed the megabill into law, Hawley introduced a bill to repeal some of its key Medicaid provisions. Around the same time, he introduced a bill to provide tariff rebate checks to Americans, another move that put him at odds with some colleagues. The senior Senate aide who sees Hawley working toward a 2028 bid said Hawley was finding a way to 'gum up the works' and be 'the problem child' at 'every major inflection point and just consistently being the problem with regards to passing the president's agenda.' 'That's frustrated a lot of Republicans who kind of view it as self-serving and not being a team player,' this person said. The Senate aide said that in an environment in which Vance clearly has the inside lane for the populist right, it is difficult to see how Hawley could break through. But regardless of what Hawley has planned politically or on policy, this person said, he will not be deterred. 'He has a plan,' this person said. 'He knows what he wants to do. And he does not really care what anyone else thinks about it.'
