JEFFERSON CITY, Mo. – On April 26th, two documents were filed a block away from each other and now, seven months later, there is a dispute arising over whether or not they were related.
In the Capitol, Rep. Rocky Miller’s HB 2689, which would reform some of the government regulations Missouri utility companies are forced to comply with, was placed on the Senate calendar. A block away, the Office of Public Counsel filed an over earnings complaint against Laclede Gas, one of the companies which HB 2689 would have affected.
Earlier this month, when the Office of Public Counsel (OPC) requested that their over earnings complaint against Laclede Gas be stayed, it was viewed as a victory for Laclede, but the head of the OPC James Owen claimed it was part of a larger overall plan to pursue the complaint inside of a rate case.
Whether or not anything ever comes of the merits of the complaint, its demise has given credence to those who questioned its timing.
“It may have brought up issues in the Senate,” Miller, R-Lake Ozark, said. “In the House, it was a bipartisan bill that would have put people to work and would have forced government regulators to treat Missouri companies fairly.”
When the OPC requested the complaint be stayed, Owen said they did so because of an upcoming rate case.
“They’re required to come in under a statute that says you either come in for a rate case or some other proceeding,” he said. “We believe they would be able to consider this complaint as a proceeding, and what we want to do is take a complaint and a rate case proceeding at the same time, so they have to come in.”
The complaint has attempted to go back in time to 2014 and allege adverse consumer affects by the acquisition of Alagasco by Laclede. However, Laclede points to savings in administrative costs and points to plans for investment in the state, and even more if government regulations are moved out of their way.
This discussion comes on the heels of Public Service Commission Staff risking the delay of Kansas City Power and Light’s acquisition of Westar and potentially denying Missouri a Fortune 500 company.
The staff’s report also attempts to assert jurisdiction to approve past acquisitions of Alagasco and Energy South because of their ownership by Laclede. Laclede pushes back their jurisdiction only to items directly affecting Missouri consumers.
Laclede has alleged that while the government’s staff report showed numerous benefits to the acquisition, they produced a summary which unfairly attacked the company.
They further allege that their acquisitions have allowed them to spread out administrative costs which have delayed the need for a rate case, and predict future rate cases will “be lower than they otherwise would have been but for the acquisitions.”
In perhaps an echoing of both gubernatorial candidates, Attorney General Chris Koster and Eric Greitens, public comments about opposing “job-killing regulations,” Laclede points out an analyst from Moody’s Investor Service that “roughly half of a utility’s credit rating is based on its regulatory environment.”
Moody’s further comment that regulatory lag concerns could justify a reduction in their rankings.
“Anytime a Missouri company has work and you have to pay more to borrow money, those costs are passed along to the consumers,” Miller said. “The people who are hurting are all too often the people who can least afford it. For the first time in a long time, Illinois has lower residential rates than Missouri. There is only four states with similar regulatory climates and their rate increases are among the highest in the nation.”
Over-earning in the utility market oftentimes means the rate paid by consumers is too high. The PSC helps set those rates, but Owen says his office has found evidence that the rate charged by Laclede is higher than what the PSC agreed to.
Furthermore, Owen says that the office has uncovered evidence not only of over earning but of “shady practices” regarding pensions, retirement, and other post-employment benefits that “cause concerns.”
With the staying of the complaint, the validity of the OPC’s findings will have to wait to be born out in a rate case that can be filed on Laclede’s timetable.
The OPC is selected by the governor, and it’s likely any rate case would be adjudicated by the PSC after the first of the year and after a new governor is inaugurated.
Rachael Herndon was the editor at The Missouri Times and also produced This Week in Missouri Politics, published Missouri Times Magazine, and co-hosted the #MoLeg podcast. She joined The Missouri Times in 2014, returning to political reporting after working as a campaign and legislative staffer.
Rachael studied at the University of Missouri – Columbia. She lives in Jefferson City with her husband, Brandon, and their two children.
