JEFFERSON CITY, Mo. — A bill, sponsored by Representative Tom Flanigan, R-Carthage, addressing infrastructure system replacement surcharges (ISRS), particularly for the company Missouri American Water, was debated and perfected in the House today.
If passed, HB1358 would allow Missouri American Water to increase its monthly rates in order to pay for future investments and improvements in infrastructure.
“This is an accounting gimmick that will increase consumer’s rates and consumers will pay more for the same exact service. Missouri American Water’s profits have increased four hundred percent the past five years and now they want to put a new surcharge on customers bills that will only increase its profits even more at the expense of Missouri families,” said Chris Roepe, Executive Director of the Fair Energy Rate Action Fund.
Rep. Funderburk
Rep. Doug Funderburk, R-St. Peters, said during his inquiry, “Current regulations are about 75 years old. Seventy-five years ago, sewers were not in bad shape. They are aging, they are failing.”
“Some of these were built during the Civil War,” Funderburk said of the St. Louis pipes.
“Bills like these are a systematic way to encourage investment in Missouri’s infrastructure at the lowest cost to consumers,” said Irl Scissors, executive director of Missourians for a Balanced Energy Future.
Several groups have come out against HB1358. The Fair Energy Rate Action Fund sent a letter to all representatives regarding the legislation.
“The Water ISRS measure is unnecessary special legislation being sought to benefit one company. The bill puts a new surcharge on customers’ water bills and forces consumers to pay higher utility rates for nothing new,” the statement reads.
The letter continues, “Missouri American Water, the company lobbying for the bill, has increased its profits 400 percent over the past five years. Its corporate stock price has doubled since 2009.”
In 2008, the company’s profit was $10 million. In 2012, their profit for total operations was $49.6 million — an increase of almost 500 percent.
The Fair Energy Rate Action Fund sees the situation differently.
“House Bill 1358 is nothing more than a money grab by a monopoly utility company that doesn’t have to worry about competition. An ISRS only looks at costs that increase for customers and prohibits considering costs that decrease for utilities,” they said. “Traditional ratemaking looks at all the costs that increase and decrease for utilities.”
They further explained that the issue can go through the Public Service Commission and does not need to be legislated.
Funderburk said that “it’s a high cost process” to go to the PSC regarding the issue.
The PSC addressed the ISRS surcharge in November 2013. The surcharge was approved to offset costs of recent improvements to infrastructure such as mains, main cleaning/relining, and facility relocation because of eminent domain.
The PSC staff response says “the ISRS will allow costs associated with certain infrastructure replacements and additions to be passed on to consumers more quickly, outside of a general rate case, without comprehensive review and analysis of all costs and expenses.”
“I agree with the American Conservative Union, which opposes the bill because it does not ‘support economic freedom and allowing working
Rep. Carpenter
Missourians to keep as much of their hard-earned money,” Rep. Jon Carpenter, D-Gladstone, said.
The American Conservative Union also reached out to all representatives by sending a letter. The group is responsible for Conservative Political Action Conference (CPAC).
The letter also opposes the bill, staying, “It seems that every year we have to address attempts to put new surcharges on Missourians’ utility bills.”
The letter continued, “These charges are, in effect, a tax on businesses and residents of Missouri.”
They concluded the letter with a mention that the vote will be considered in their next rating of the legislature.
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.
