JEFFERSON CITY, Mo. — A bill in the upper chamber that would allow water and sewer companies to request rate changes more often is drawing a line between companies and consumer groups.
“This act is designed to help the water and sewer companies attract private capital and to make efficient infrastructure improvements to Missouri in a safe, reliable, and cost-effective manner,” sponsor Sen. Bill White said. “Unfortunately, it can be difficult for private companies to track capital for water and sewer projects in some parts of Missouri; the reason is a regulatory lag, which is the time it takes between capital investments made and when the company can start paying back the debt to their investors.”
White pointed out that there were many issues that could take place in the three-year interim between regular rate cases with the Public Service Commission (PSC) — where the rate changes could take years to take effect and investors would wait to recoup investments. Under White’s bill, companies serving more than 8,000 customers could request a slight increase every six months through a water and sewer infrastructure rate adjustment (WSIRA) to keep up with the conditions of their equipment and speed up cost recovery.
White said St. Louis County implements its own version of the system and other states do the same.
Seven witnesses testified in favor of the bill before the Senate Commerce, Consumer Protection, Energy, and the Environment Committee Wednesday. Christine Page, director of government affairs for Missouri-American Water Company, said the bill would allow companies to implement gradual rate increases rather than large sums all at once.
“Many of our pipes and other critical infrastructure in Missouri are 60 to 100 years old and are nearing — or, quite frankly, have surpassed — their useful expectant life and need to be replaced,” she said. “With a mechanism like this, we could do a filing every six months to recover the eligible projects and investments that we’ve made in the prior six months. You might see $1 or a 50 cent increase — it’s those small incremental increases over that period as opposed to a sudden $6 increase.”
Two witnesses testified on the other side of the argument, positing that the bill was an attempt to circumvent the commission’s authority and gouge prices for customers without executive barriers and a slight to consumers.
“Having done this work for 29 years and talked to numerous large customers about this bill, I can tell you this bill is bad for ratepayers, it’s bad for jobs, and it’s bad for Missouri’s economy,” said David Woodsmall on behalf of the Midwest Energy Consumers Group (MECG). “This mechanism bypasses the commission’s review of the utility’s profitability and allows for increases between rate cases without any consideration. The commission can’t do anything as long as they say they’ve done the numbers and are entitled to it.”
The committee did not move into executive session on the bill.