As the midterm elections rapidly approach, politicians in both parties across the country are debating the issue of affordability. And electric costs are a big part of the conversation.
In their rush to find solutions, lawmakers are taking aim at short-sighted policies such as banning data centers and penalizing utilities for investments in the electric grid.  These ideas might mean a few dollars saved in the short term but would leave the electric grid weaker and more expensive for customers in the long term.
While lower electric bills are obviously desirable, it’s important to begin with facts and avoid the pitfalls that are playing out in other states.
Missouri already has some of the lowest electric rates in America. According to the nonpartisan U.S. Energy Information Administration, Missouri electricity prices are well below the national average and rank among the lowest in the nation—especially for residential customers.
Similarly, an independent analysis conducted by Charles River Associates indicates only 11 states experienced a smaller increase in rates than the Show-Me State from 2020-2025 – ranking Missouri in the bottom quartile.
How does Missouri keep its electricity costs low compared to other states?
(1) ‎Vertical Integration vs. “Deregulation”: Missouri is a state with vertically-integrated utilities. “Vertical integration” means the same local electric company controls multiple stages of the electricity supply chain—from generating electricity to delivering it to homes and businesses. This is part of the secret sauce that keeps our rates low. On the other side of the ledger, some states have broken up their local electric company into two pieces: (1) the energy generation side and (2) infrastructure. This “deregulation” or restructuring has led to the highest rates and steepest increases over the last few years. In deregulated states like New York, New Jersey, California and Illinois, higher prices in the wholesale energy markets have caused electricity rates to increase. These states are subject to dramatic price swings because energy providers in those states don’t own their own power generation – unlike Missouri. According to the Citizen’s Utility Board, residential customers in Illinois have lost more than $2 billion between 2015-2025 in higher prices over the regulated utility price. If Missouri were to become a “choice” state, the data shows rates would go up, reliability would go down and Missourians would suffer.
(2) Strict Rules for Data Centers: Data centers are becoming increasingly important to our national security. Additionally, data center projects provide jobs, investment and sizeable growth. While Missouri should not turn away these projects, existing customers must not be asked to subsidize them. Fortunately, data centers are already paying their fair share in Missouri thanks to bipartisan legislation passed in 2025. In a recent Ameren Missouri filing with regulators, data centers are expected to contribute more than $20 million to help lower costs for all other customers. While data centers may be driving costs up in some states, the same cannot be said in Missouri.
(3) Investing for the Long Term & Workable Regulatory Oversight: Utilities, like any other capital-intensive enterprise, fund improvements and long-term investments by borrowing money and attracting private capital. The authorized return on equity—or ROE—is part of what allows them to attract the investment needed to build, maintain and upgrade the grid. Some have argued that cutting utility ROEs would lower customer bills. But that simple narrative overlooks an important reality: lowering ROEs can make it more expensive for utilities to raise the capital needed to invest in the grid. Local electric companies do not set their own ROEs. In Missouri, the Public Service Commission establishes authorized ROEs through a lengthy, public regulatory process designed to protect customers while ensuring utilities can attract the capital necessary to provide safe and reliable service. Setting the ROE too low carries consequences. A lower return can weaken a utility’s financial profile and creditworthiness, potentially leading to a lower credit rating. Higher borrowing costs resulting from a poor credit rating do not simply disappear. Over time, they can increase the cost of providing electric service and make it more difficult and expensive to invest in strengthening the grid. Efforts to artificially reduce utility ROEs may appear to offer short-term savings, but if they increase borrowing costs or discourage investment, those savings can quickly disappear—leaving customers to pay more later to address problems that could have been prevented.
 
Missouri’s lower electricity costs did not happen by chance. Our state’s positive national ranking is the result of smart rules, careful planning and steady investment.

That doesn’t mean Missouri should simply stand still. We should continue looking for practical ways to help families manage their energy costs. Utilities, regulators and policymakers should do more to connect customers with energy assistance programs and other tools that can help lower monthly bills.

The goal should not be chasing short-term political solutions but rather, to build on Missouri’s success: maintaining strong regulatory oversight, planning for future growth, investing in a reliable grid and giving customers practical tools to control their own energy costs.

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