JEFFERSON CITY, Mo. – The legislature’s crusade to bring an estimated 500 jobs to the bootheel is moving forward in the State Capitol as Missouri’s special session continues.
Rep. Don Rone’s bill, HB 1, is expected to hit the House floor Wednesday after surviving two different House committees on Tuesday afternoon.
Rone’s bill seeks to push forward a path to give lower electric rates to two industrial customers, an aluminum smelter and a steel mill, who are looking to set up shop in the New Madrid area.
The real work took place in the earlier of the two hearings when the House Committee on Utilities took a fine-tooth comb to three bills concerning the proposed steel mill and smelter in Southeast Missouri.
Two sentiments seemed to emerge from the panel of committee members as they debated the bills before them.
The first was the concern expressed by some of the Democratic members of the committee about changing state laws and giving special rates to a company that no one could name.
The aluminum smelter will be that formerly used by Noranda in St. Jude Industrial Park, which was purchased by a Switzerland-based firm and run through a subsidiary company called Magnitude 7.
“The infrastructure is already there for old Noranda, for Magnitude 7, but nothing for the steel mill is there,” Rone told the committee. “It will be constructed in New Madrid by a private constructor.”
But as for the steel mill, lawmakers continued pushing for answers as to who that company would be. Rep. Rone told the committee Tuesday afternoon that the owner has asked his name and company’s info be kept anonymous.
“The gentleman has asked for us not to mention his company or his name,” Rone said. “You know as much as I do.”
“You at least know who we’re talking about,” Merideth responded. “This is narrowly tailored legislation for a specific company and we don’t know who it is. And he has specifically asked for special legislation. I still want to know who I’m giving a deal to.”
“Every state would be calling him and asking him to come to their state,” Rone said. “After we pass this, if he decides not to come, I’ll tell you who he is and apologize to this committee.”
Rep. Tracy McCreery, D-Olivette, said she was struggling to understand why Ameren customers should pay for an economic development “plan” for the bootheel, and called it a tax.
“You feel like we owe this to the bootheel? We’re charging Ameren customers additional money to help a mystery company,” she said. “Why is it the responsibility of Ameren ratepayers?”
“They don’t have the ability to help themselves. They don’t have the ability to go find jobs like they do in St. Louis or Jefferson City,” Rone said. “My district’s mean income is $31,000. That’s how poor we are. They’re trying to survive, and we’ve got the ability to throw out a lifeline.”
“You all should be doing something to help your neighbor,” Rone said.
The second concern among committee members was that the two pieces of the original bill were two separate issues. The first part of Rone’s HB 1 concerned the aluminum smelter and the steel mill, while the second focused on the enabling provisions for the PSC.
“It’s my belief these are separate issues and they should remain separate issues,” Rep. Peter Meredith, D-St. Louis, said. “This is just about economic development and the jobs we’re trying to create.”
When Rone’s bill came up, Utilities Chairman Rocky Miller said he would put an amendment on the bill, carving out the second part from the bill’s language and separating the two.
Merideth also put forward a bill, which he tried to place as an amendment to Rone’s bill.
Merideth’s bill sought to add on certain provisions and create legislation that would apply to any company of a certain size looking to move to the Show-Me State.
He said Missouri shouldn’t have an incentive that applies to just one project, and that his bill was drafted so any large industrial user can apply for a special rate. He said his drafted legislation would give more authority to the Missouri Public Service Commission. But the part that Merideth fought most strongly for was his provisions that created a level of accountability for the companies coming.
His legislation would have put stipulations on the companies, requiring them to provide the equivalent of 450-500 full-time jobs, while also using a tracking mechanism to measure if they were meeting the benchmarks given to them by the PSC.
“We shouldn’t be subsidizing a deal if it doesn’t come through the way it was promised,” he said.
It also included provisions for “clawback” language, meaning that if the conditions are not met, the company would lose the special rate and would be required to pay back the difference.
Rep. Jay Barnes, who also filed legislation, spoke of his concerns about the bill Merideth had put forward, saying he felt it was too broad in its scope. In the end, that bill was put on hold, and the committee continued their work on the other bills.
The House Committee also heard Barnes’ HB 5, which he said addressed the issue of a “too broadly-worded scope,” but after explaining his legislation, it was also placed on hold.
A couple of legislators expressed a desire to see a clawback option on the bill, as the current legislation still carries language preventing the deal from being modified or stopped while still in the duration of its term. Merideth is expected to file an amendment on the House floor to address that on Wednesday.
The measure moved out of the House Utilities Committee on a 10-3 vote, and the next committee, the Rules committee chaired by Barnes, wasted little time in passing the bill with a vote of 12-1 in a matter of minutes.
Following the passage of the bill through both committees, Warren Wood, Ameren Missouri’s Vice President of External Affairs & Communications, released a statement saying that the smelter and steel mill portion of the bill, which passed through the committees, will give the PSC expanded authorities to consider special rates and create jobs.
“We continue to support this important opportunity for good paying jobs in southeast Missouri,” Wood said.
But the removal of the PSC enabling section, the second portion of HB 1 in its original form, did not. Wood says that section would have given the PSC new tools and flexibility, which they had asked for last year in one of their working cases.
“These new regulatory tools, many of which are already being used in all but a few other states, are helping those states move ahead with grid modernization plans to benefit their customers,” he said. “Unfortunately, despite strong bi-partisan support, this section was removed from the bill due to opposition from a small group of senators.”