This Week in the Missouri PSC: November 16, 2017


Commission weighs in on how to handle alleged issues with Empire’s hedging practices

JEFFERSON CITY, Mo. – With their chairman returned this week, the Missouri Public Service Commission knocked out five orders before delving into the topic of a prudence review of Empire District Electric Company’s fuel adjustment clause, or in particular, the company’s hedging practices.

It was an issue highlighted during a hearing earlier this year, with Empire’s hedging practices being questioned as imprudent and causing harm to ratepayers.

In Thursday’s agenda meeting, Commissioner Scott Rupp spoke to his fellow commissioners, discussing what he would like to see done to address the perceived issue, saying that their “refusal to change from their self-imposed mandate” had led the company to lose nearly $100 million in a decade. He contended that the issue of risk had been placed on the ratepayers, not the company, through their hedging practices, and urged the commission to take actions in rectifying the scenario.

While his fellow commissioners agreed they should review the company’s hedging practices in the next rate case, they did not believe it fitting to look back and judge in hindsight. As Chairman Daniel Hall noted, the practices had not been questioned several times during the time period in question, but if there had been an issue, that would have been when it should have been brought up.

Hall did say he thought it would be appropriate for the PSC staff, the Office of Public Counsel, and Empire to meet on the issue of hedging practices and talk, in addition to a review during the next rate case.

The commission also discussed a rate case and Missouri American Water’s AAO request for lead service line replacement.

“All we are doing here is making a determination as to whether the company should book its expenses pursuant as an accounting authority order allowing us to take that issue up at the next rate case,” Hall said. “I personally am of the position that because these costs are extraordinary, unique, and non-recurring, it is appropriate.”

The commission signed off on all five orders and tariffs presented before them on Thursday.

The first concerned Empire’s request to implement a fuel rate adjustment following period in which the company over-recovered $1,045,682 from its customers. The commission approved the company’s true up with a 5-0 vote.

The second order was a request for approval by Terre Du Lac Utilities for a loan it obtained for $126,000 by pledging 380 shares of its stock to perform improvements for the benefit of its water and sewer systems. The commission approved that, 5-0.

The commission also approved a change of electric supplier, allowing the City of Farmington to take over eight street lights from Ameren Missouri as they now fall within the city limits.

The PSC also denied a complaint against Ameren, in which Gerald Fisher alleged incorrect billing and disconnection of services. The commission denied the complaint with a 5-0 vote, saying that the complainant had failed to show the burden of proof.

The final order of the day was to sign off on the rule changes made in regard to manufactured housing, which is now being sent to JCAR.

The commission will not meet next week, due to the Thanksgiving holiday, but will return for the next agenda meeting on Nov. 30 at 12:30 p.m.

Benjamin Peters is a reporter for the Missouri Times and Missouri Times Magazine, and also produces the #MoLeg Podcast. He joined the Missouri Times in 2016 after working as a sports editor and TV news producer in mid-Missouri. Benjamin is a graduate of Missouri State University in Springfield. To contact Benjamin, email or follow him on Twitter @BenjaminDPeters.