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PRESS RELEASE: REP. KORMAN FILES ENERGY BILL TO HELP MISSOURI CONSUMERS BASED ON FREE MARKET PRINCIPLES

PRESS RELEASE
February 3, 2015

 

REP. KORMAN FILES ENERGY BILL TO HELP MISSOURI CONSUMERS BASED ON FREE MARKET PRINCIPLES

 

JEFFERSON CITY—Missouri energy consumers would see the end to the decades-old process of how utilities build power plants and purchase electricity with the bill introduced by Representative Bart Korman (R-District 042) that establishes a transparent competitive bidding process for the state’s electrical corporations. This change would attract more businesses to Missouri, creating jobs and investment and benefiting consumers.

Representative Korman said: “Transparency, accountability and opportunity make for good governance in both public and private business transactions. HB 784 would ensure that these free-market principles are applied by Missouri’s investor-owned utilities when they consider whether or not their customers need new power plants in the state.”

Currently utility companies either make electricity or buy it from others and costs are passed through to consumers. Additionally, a utility is entitled by law to include a profit in the price it charges. The result of current law is that it provides the incentive for utilities to build expensive power plants, profit on high construction costs and pass along costs to the consumers. Costly after-the-fact reviews are the primary tool available to consumers to have input in these cases. This would allow the approvals from consumers early in the process and modernize part of the process.

Competitive Energy For Missouri, or CEMO, is a citizens’ action group dedicated to advancing policies that would keep electricity prices low for consumers by changing the current system to a transparent Request For Proposals process. Requiring competitive bidding would hold the utilities more accountable for management decisions by subjecting them up-front to the discipline of a competitive market and give consumers known costs prior to the construction of the project.

CEMO’s Managing Director, Lynne Flowers, said: “The new process would generate opportunities for investment from across the electricity industry in an era of unprecedented change. Specifically, HB 784 would establish a baseline competitive evaluation of third party and utility proposals to meet Missouri’s future electric needs. Future investment decisions would be market-tested and based on concrete, transparent assumptions and forecasts, ensuring the best deal for customers. It also mitigates the need for litigation-heavy, after-the-fact reviews by the Public Service Commission.”

Consumer groups, out-of-state independent power producers and industrial groups have been engaged with CEMO on developing this policy for the state over a year. For more information, please visit www.competititveenergymo.org .

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