JEFFERSON CITY, Mo. – For the first time in years, the issues of solar energy and electric grid modernization are gaining momentum toward removing regulations for private investment to begin in the state. However, opponents are ratcheting up the rhetoric with increasingly extreme attacks.
Sen. Ed Emery and Rep. Rocky Miller both introduced several similar energy bills this session, and Wednesday’s hearings on SB 242 and HB 747 proved to be a tipping point in extreme rhetoric.
While there are some differences between the two bills, both seek a voluntary rate proceeding for gas corporations, allowing for annual true-ups instead of the regular three-year adjustments to address “revenue discrepancies” caused by to weather and conservation-related changes in usage by the customers.
The most contentious debate was around recoupling, which refers to the disassociation of a utility’s profits from its sales. Instead, the rate of return is set to meet revenue targets, and rates are adjusted up or down to meet the target at the end of the adjustment period. In short, if the company is looking at going over the target, they could lower the rates to customers in order to reach the target and not exceed it, sharing savings. On the other hand, it could mean high rates if they are not on pace to reach the target.
Several witnesses turned up to testify in favor of Miller’s HB 747, including former Missouri Public Service Commissioner, Kevin Gunn, who appeared Wednesday night to represent the Natural Resources Defense Council.
He argued that the most important reason to pass the bill was the potential implementation of conservation and efficiency measures, and the ability to allow individual customers to save. He also said he believed that it should eliminate overreach complaints.
“You should never have an overreach complaint because the PSC would be looking at this regularly. They’re making quarterly filings and the PSC is reviewing them. It’s complete transparency,” Gunn said. “This is just changing the mode.”
Gunn compared the bill to schoolwork. Under the current laws, he said it was the equivalent of turning in a paper and awaiting a grade. He says that under the provisions of HB 747, it would be more like turning in a rough draft, getting reviews, and making changes before submitting the final paper.
Rep. Tracy McCreery, D-St. Louis, said she was unsure as to how it benefits the consumer, saying that she thought it seemed to give the choices to the utilities, but not the customers.
“If this bill would go forward, this gives a lot more power to the gas company to decide which way they want to go. I think it actually eliminates the certainty,” she said. “The way I read this bill, the utility companies will be able to choose how they want to proceed. In a weird way, it makes it more uncertain for the PSC and for ratepayers because it puts the utility company in charge of how they want to navigate.”
McCreery’s comments center on one line in particular in the bill, which states “a gas corporation may terminate it’s participating in this update process at the conclusion of any updated test year,” which would mean they could remove themselves if they wanted – or, as some opponents of the bill pointed out, if it might be more profitable to the company to do so.One reason for doing so is simply based on the weather, which has led opponents to call that portion of the bill a “weather tax.”
Opposition to the weather tax says that if Missouri has an unseasonably warm winter, and people use less gas, the rates will automatically go up.
Jay Hardenbrook represents the Missouri AARP and says they have serious concerns about the bill because of how quickly the rate hikes could go into effect, getting rid of regulatory lag, and the weather tax.
“We see this as taking some of the risks off of utilities and putting it on the consumers. Basically, you’re putting all of the risks on them,” he said. “We believe that regulatory lag is actually a replacement for competition. We believe that’s a good thing, and requires the companies to be more fiscally responsible and not push the costs directly onto consumers.”
Both bills currently await a vote from the committees.