New state law cuts and caps electric rates, Ameren Missouri says customers should see benefits quickly

   

JEFFERSON CITY, Mo. – Ameren Missouri customers could soon see lower rates, thanks to a new law passed into effect by the Missouri legislature.

SB 564, sponsored by Sen. Ed Emery, was signed into law earlier this month, putting in place new rate cuts and caps and changing the state’s laws dealing with utility rates that have been in place for over a century.

Ameren Missouri customers are expected to see an estimated five percent rate cut, with the new law placing caps on rates and accelerating investments to modernize the electrical grid in Missouri.

Lawmakers have for years looked at a number of ways to modernize utility rates and modernize Missouri’s outdated grid system, with hopes of making the grid more secure and smarter.

“For years our customers have expressed a desire for more stable and predictable energy bills, as well as a modernized electric grid that is smarter and more resilient to outages,” said Michael Moehn, president, Ameren Missouri. “The new law delivers on this important task. We look forward to delivering a plan that will greatly benefit our customers, create jobs, bolster the grid and enable new economic growth in Missouri. We thank the coalition of customers, businesses, community organizations and lawmakers that came together this year to upend the status quo and make energy infrastructure improvement and customer rate stability a reality.”

According to Ameren Missouri, the new law’s elements include:

  • Rate Cut – By updating century-old regulations, the law fosters the quick return of more than $100 million annually in federal tax savings to Ameren Missouri customers, which translates to a more than five percent rate cut for the average customer.
  • Rate Freeze – The bill freezes rate adjustments for Ameren Missouri customers until April 2020.
  • Rate Caps – Over the next five years, the law limits Ameren Missouri rate increases to a 2.85 percent compound annual growth rate, applied to electric rates established April 1, 2017. This unprecedented rate cap, the first in Missouri and the most stringent in the United States, represents an average increase of about half the annual average electric rates have gone up each year over the past decade in Missouri, for investor-owned utilities.
  • Grid Modernization – A $1 billion plan from Ameren Missouri will create jobs in the state of Missouri, bolster grid security and upgrade the energy delivery system with smart technologies. The full plan, detailing improvements over the next five years, is expected to be submitted to the Missouri Public Service Commission (PSC) by early 2019.
  • Solar Energy – The law encourages renewable energy by providing up to $28 million in solar rebates for customers, starting in 2019. The law also calls for Ameren Missouri to allocate $14 million to utility-owned solar by 2023.
  • Economic Development – To drive economic growth, rate incentives were established to support Missouri businesses that expand their operations.

In addition to that, the new law included a 90-day deadline for utilities to pass along savings from the federal tax cuts to customers. Ameren Missouri is planning to move even quicker to return more than $100 million to customers and reduce rates, which started with a filing with the PSC made on June 1, within hours of the bill becoming law. Subject to Missouri PSC approval, the company hopes to have this rate cut in place for customers as soon as possible later this summer.

“As advocates for families, small businesses and households, we are pleased that the new law provides for the first rate caps in Missouri and will return more than $100 million to consumers within 90 days of becoming law,” said Chris Ventura, Midwest executive director of the Consumer Energy Alliance, a national advocate for energy consumers. “We look forward to working together with Missouri policymakers to support building the energy infrastructure that not only provides upgraded capabilities but also protects the pocketbooks of people on fixed incomes or living paycheck to paycheck. Nothing is more important to us than ensuring energy consumers – especially those struggling to make ends meet – are treated fairly. We also support provisions of the new law that help grow Missouri’s economy through job creation, as a result of energy grid modernization, and by providing incentives for large energy users who expand their businesses. Business growth helps keep energy costs down for all consumers.”

“The rate cuts and caps signed into law will allow businesses to grow, while the economic development incentives included in SB 564 will further enhance Missouri’s reputation as a low-cost energy state,” said Daniel P. Mehan, president and CEO of the Missouri Chamber of Commerce. “The work done during the 2018 legislative session to make Missouri a better place to create jobs is some of the most productive in the past decade. In particular, the Missouri Chamber of Commerce and Industry is proud to have worked with lawmakers to cut utility bills for Missourians.”

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 benjamin@themissouritimes.com or follow him on Twitter @BenjaminDPeters.