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Ameren, Noranda fight for grid modernization bill

JEFFERSON CITY, Mo. – A bill offered by Rep. Rocky Miller, R-Lake Ozark, primarily seeking to modernize the state’s electricity grid has set utilities companies at odds with many consumers in the state. Miller hopes the bill will streamline utility upgrades.

The stated design of HB 2816, billed as the “21st Century Grid Modernization and Security Act,” is to allow for the imposition of earnings caps, rate caps, performance standards and other consumer protections when provided power by electrical corporations; encourage investment in Missouri’s electrical infrastructure, and provide competitive rates for high energy-use customers.

Miller said the bill would make the process easier for utilities companies by cutting back on some regulations by the Public Service Commission (PSC) while providing protections for consumers across the state.

Miller
Miller

“[The bill] allows for electric utilities to use a newer version of rate structures,” Miller said. “What I want it to do is be a streamlining of the current public service structure instead of waiting for a review when they get around to the PSC.”

Representatives from Ameren, the state’s largest power supplier, said the bill was a way to help push Missouri past its deteriorating grid and infrastructure.

“If Missouri continues to stand still, we will continue to lose ground and lose 21st century companies,” Vice President of External Affairs at Ameren Warren Wood said.

One consumer that testified in favor of the bill, however, was Noranda, the aluminum smelting company in Southeast Missouri that filed for bankruptcy in February.

The latter part of the bill also has more language that would give Noranda more favorable rates. Mike Griffin, a vice president for the company, said that electricity expenditures made up 30 to 40 percent of Noranda’s costs and that lower rates could be the only thing that might save the company.

“The existing power contract was far above the world average for smelting electricity contracts, and all the efficiencies, benchmark practices can’t make up for that,” Griffin said. “This is the only chance to give the families in the bootheel a fighting chance.”

However, Steve Spinner, a category lead for energy procurement for Monsanto, testified in opposition to the bill, citing it as one of many attempts by Ameren and power companies to reduce regulation.

“These bills usually contain clauses that reduce PSC oversight and allow the utilities to operate almost as unregulated monopolies,” he said, adding that “the looming infrastructure problem” oft-cited by Ameren has yet to be identified over the last 13 years he has procured energy services for Monsanto and Anheuser-Busch.

Other large consumers that offered their opposition to the bill included Nestle-Purina, Bayer Company, Ford Motor Company, General Motors, and Proctor and Gamble, Spinner said.