Commission looks to finalize issues in Spire rate case before final vote
JEFFERSON CITY, Mo. – This week’s agenda meeting of the Missouri Public Service Commission only had a total of three items on the agenda, but almost the entire meeting was spent solely on the Spire rate case.
The only tariff and new order of the day concerned Empire District’s PGA and the ACA balances for the 2015-2016 period, with an under-recovery in two areas and an over-recovery in another. The staff made some recommendations for policies, which Empire agreed with.
Commissioner Scott Rupp said he appreciated and believed it to be a step in the right direction.
The true work of the day concerned case discussion in the rate case of Spire Energy, the fourth one in this particular case.
Last week, Chairman Daniel Hall had laid out a proposal of how to handle the tax reforms, by reflecting the savings going forward and placing trackers on that to ensure that their initial estimate was accurate.
The issue of capital structure was still an issue to be dealt with, one that the commission had agreed to bring up again this week.
Spire says its Missouri utility is capitalized with 54 percent equity and 46 percent debt. In a preliminary vote, the PSC had intended to use a 49 percent equity, but Commissioner Rupp had spoken on the issue, eventually swaying the thoughts of Commissioner Bill Kenney.
Both Kenney and Rupp agreed that they should use the company’s position on capital structure, while Commissioner Ryan Silvey said he was of a similar mind but had some concerns, particularly regarding the $210 million balance, which was the acquisition premium paid by Spire.
“I’m asking that if we give them 54 percent, that they cannot use the $210 million to get to that 54 percent,” Silvey said.
Hall said he shared that concern, saying the problem was it was difficult to determine where the money came from, whether it was equity or debt.
“We don’t know, and it may be one of those things that are not knowable,” Hall said.
The general agreement was to side with Spire’s position and look at it in the coming week when it would come to a vote.
On the cost of debt, they would use Spire’s position and exclude short-term debt.
On the issue of gas, they all agreed that Spire should be treated the same as every other natural gas company they regulate.
The PSC also came to a decision regarding compensation.
“We made a decision last week that, going forward, we did not want the company to have an incentive compensation package that includes an earnings-based component,” Hall said.
Saying that he hated black box settlements, Hall said that he did not believe they should go back and figure out the extent to which the company capitalized earnings-based compensation in the past.
“It feels a little like retroactive ratemaking,” Hall said, saying that would be more appropriate for a complaint case to address any such issues. He said he wanted to make it very clear going forward that the commission does not approve of such a practice.
The PSC is expected to officially vote on the rate case in the following week at the agenda meeting.
After that, the commission received a report from staff regarding the Tax Cuts and Jobs Act of 2017.
You can read the public version of the report below:
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Benjamin Peters was a reporter for The Missouri Times and Missouri Times Magazine and also produced 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.
