JEFFERSON CITY, Mo. – Monsanto formally withdrew its opposition Tuesday to SB 1028 and HB 2689, which would create a comprehensive state energy plan, in a letter to Sen. Ryan Silvey, R-Kansas City, and Rep. Rocky Miller, R-Osage Beach, the bills’ sponsors.
Duane J. Simpson, Monsanto’s state and local government lead, told the legislators that changes in the legislation led the company to the decision to withdraw its opposition.
“The proposed legislation is without question better for all consumers than when it was originally proposed,” he wrote. “In total, it reduces the maximum impact of this legislation on all ratepayers almost in half.”
Monsanto had been one of the main opponents of the legislation. But Miller says their support was a sign that the bill’s provisions would help everyone by instituting rate caps.
“I’m happy to see that they recognize that streamlining the rate process would be beneficial to all,” Miller said.
In the letter, Simpson highlighted nine changes to the legislation that allowed Monsanto to withdraw its opposition.
- Revenue requirement caps were lowered. The maximum annual cap was lowered from 4.75 percent to 4.5 percent. The average annual rate cap was lowered from 3.5 percent to 3.15 percent. Overall, the changes lowered the maximum amount of cumulative increases under the caps to less than 40 percent over the decade when it was originally more than 50 percent.
- Everything that can be reasonably placed under the caps are now under the caps, including the expected environmental compliance costs over the next decade for Ameren, KCPL and Empire.
- The improvements to the state’s renewable energy portfolio will not cost ratepayers more than they would pay under current law. All of the improvements to the renewable energy portfolio are now under the caps and the legislation clarifies that Prop C’s 1% rate impact cap is still in effect allowing for no new net impact on ratepayers.
- The utilities have agreed to reduce both their initial ROE and the slope of growth for the ROE in future years. The ROE is now 9.33% down from 9.45% and though the ROE is still tied to the 30-Year Treasury Bond, after the first 1% increase in interest rates, the ROE will only increase at 70% the rate of the Treasury Bond.
- Utilities would now have to give a one year written notice in order to exit performance based ratemaking.
- There is now a hard rate cap of 4.5% the first year a utility exits performance based ratemaking and a 0% rate cap the second year.
- The legislation clarifies that the same Public Service Commission oversight for acquisitions that exists in current law will exist under performance based ratemaking.
- The legislation clarifies that the same protections that exist today with regard to double leveraging will continue to exist under performance based ratemaking.
- The proposal improves upon the Economic Development Rider (EDR) that exists in current law. It grandfathers in and extends the EDRs that KCPL had previously negotiated in its territory. It also recognizes that Ameren has never exercised its discretion to negotiate an EDR to encourage growth in the manufacturing base in its territory. A formula has been developed to encourage large scale developments of more than 500kw at single sites above 15mw or at up to five separate sites totaling 30mw.