PSC rules on Empire District’s hedging practices, opens case to look into effects of new tax reform
JEFFERSON CITY, Mo. – In the first meeting of the new year, the Missouri Public Service Commission came together following the announcement of the previous day, in which Governor Eric Greitens named Sen. Ryan Silvey as the next member of the five-member commission, replacing Commissioner Stephen Stoll.
The news, however, did not disturb the commission from their duty, as they ruled on five tariffs and new orders in the Wednesday afternoon agenda meeting.
Perhaps the most significant of these items was the final tariff and new order concerning Empire District’s FAC and sixth prudence review regarding their hedging practices. The subject of some controversy over the past few months, with the PSC holding an evidentiary hearing and discussing the matter in an earlier agenda meeting.
The majority of the commission agreed that the practices by Empire were appropriate, though all seemed to echo the sentiments shared by Chairman Daniel Hall, who pointed out that the hedging practices have been in effect since 2002, and that during the first few years, it brought gains to the ratepayers, but also led to losses in subsequent years. That being said, Hall stated that the prudence review was simply to allow the PSC to “climb into the shoes of the utility at the time and decide whether what they did was imprudent or unreasonable.”
“I don’t believe it is appropriate for us to Monday morning quarterback the policy with inappropriate benefits of knowledge of what happened,” Hall said.
“I would like the record to show that I have always hated Monday morning quarterbacks,” Commissioner Bill Kenney said with a smile.
Commissioner Scott Rupp voted against the order, noting that even if they change their practices tomorrow, they’re still hedging out for at least three years. He stated that it is a good idea for a look to be taken at the next rate case and see if it is appropriate going forward.
The order was approved 4-1.
The first order of the day concerned an application from Liberty Utilities for the authority to issue longterm unsecured debt, which received the support of staff as well as the Office of Public Counsel. It was approved 5-0.
The PSC also approved Macon Electric Cooperative’s and Marcelline’s application for approval of change of supplier in Linn and Chariton Counties by a 5-0 vote.
Another interesting item of note was the PSC’s order agreeing to open a working proceeding to look into the effects the new tax cuts would have on Missouri utilities. Ameren asked the commission for date change, noting that their books aren’t even done yet, and instead asking for Jan 31 instead of Jan 12 that had originally been listed. The commissioners agreed postponing the deadline for response was a good idea, and approved minor revisions.
“This is clearly a weighty issue and appears to me that it will have a significant impact on utilities and therefore on ratepayers,” Chairman Daniel Hall said as the commission approved the order with a 5-0 vote.
The final order of the day was the unanimous approval of Ameren Missouri’s true-up and fuel adjustment clause. 5-0
The commission also approved the sending of rule changes to the Governor as well as the results of their rule review, in accordance with Gov. Greitens’ executive order. The PSC staff said this would complete the internal review, saying they had filled out the templates sent to them by the Governor’s Office. They noted that a final report must be prepared and finished by May 31st, but said they hope to have it done much earlier.
The PSC’s next meeting will take place on Wednesday, Jan. 10 at 9:30 a.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 firstname.lastname@example.org or follow him on Twitter @BenjaminDPeters.