Protesters rally outside Capitol against utilities law

By Charlie Dahlgren, Missouri News Network

JEFFERSON CITY — Around 20 people gathered outside the Missouri Capitol on Wednesday to protest the signing of a sweeping utilities bill that, opponents argue, could cost residents an additional $1,115 on their yearly electricity bills.
Wednesday morning, Gov. Mike Kehoe signed Senate Bill 4 into law. Touted for attracting new industry, providing consumer protection and securing energy independence, the governor said SB 4 introduces vital reforms in response to the state’s growing electricity needs.
“This is about powering Missouri for Missourians and not relying on other states and countries to produce our power,” Kehoe said in a news release following the signing.
However, many Missouri residents aren’t sold. Concerns about three provisions within the law brought together legislators and speakers from the Sierra Club, Consumers Council of Missouri and NAACP for the rally.

A successful proposition from 1976 prevents energy companies from charging people for construction of a new power plant until the plant is fully operational and serving the public. SB 4 adds an exception to that statute for any project approved by the Public Service Commission.
Paying in advance for power plants is called Construction Work in Progress, or CWIP. John Coffman, a lawyer for the Utility Consumer Counsel who attended the rally, said CWIP will be a large part of the $1,115 that he projects SB 4 will cost Missouri residents.
“That’s one of the things that’s very expensive,” Coffman said.
Coffman points to South Carolina, where they passed similar CWIP legislation in 2008, as an example of why allowing this exception is a bad idea. There, billions of dollars were collected for a new nuclear power plant that was never finished.
“Almost none of that money got back to ratepayers,” Coffman said. “So it can be a huge boondoggle.”
In a press release following the signing of the bill, Kehoe celebrated CWIP as an incentive for new power generation facilities, reducing financing costs and saving Missourians money in the long run.

As the law stands now, real and audited expenses for the utility company are used to determine the rates charged to consumers. SB 4 allows utility companies to use a projected Future Test Year, or FTY, to determine rates.
Although the Public Service Commission ultimately decides what rates electric companies are allowed to charge, opponents of this law say allowing utilities to use FTY projections awards them too much power in raising rates on struggling consumers.
“This is a pattern of behavior from shameless polluters,” said Gretchen Waddell Barwick, director of the Missouri chapter of the Sierra Club. “Monopoly utilities like Ameren, Spire, and Evergy continually put the profits of shareholders over the wellbeing of Missourians.”

Another controversial provision is a mechanism called Plant in Service Accounting, or PISA. According to the governor’s office, PISA allows utilities to recover certain depreciation expenses from new natural gas power plants over a 20-year period.
Supporters say this incentivizes the construction of new power generation facilities and helps to avoid rate shocks for consumers, but opponents at Wednesday’s rally suggest PISA could cause more harm than good for consumers.
Similar to their critiques of FTYs, opponents say PISA allows utility companies to raise rates based on just one expense, rather than taking a comprehensive look at the total cost of producing the utility.
Although the Sierra Club representatives attended the rally with some environmental concerns, the main focus of the gathering was saving Missourians money.
Sen. Tracy McCreery, D-Olivette, told the gathering she gets calls every day from constituents who are struggling financially.
“Senate Bill 4 is a total disregard for just and reasonable prices,” McCreery said. “(It) contains all kinds of language that only will benefit the shareholders and the executives of these companies. It does nothing to help everyday Americans.”