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Water, sewer rate adjustment policy change perfected after marathon Senate debate

JEFFERSON CITY, Mo. — The Missouri Senate perfected a change to rate adjustment policies for water and sewer utilities early Wednesday morning. 

SB 44 from Sen. Bill White would allow water and sewer companies to request rate changes more often. Under current law, utilities go to the Public Service Commission (PSC) for a rate adjustment on a three-year cycle. The legislation would allow companies serving more than 8,000 customers to request a slight increase every six months through a water and sewer infrastructure rate adjustment (WSIRA) to keep up with the conditions of equipment and speed up cost recovery. 

White said the bill is restricted to existing infrastructure that is already “in service, being used, or is useful.” It does not deal with new projects, expansion, or growth, he said. 

“This saves ratepayers money,” White said Tuesday afternoon. “If you are going to replace a valve and you don’t have the ability to raise the capital to replace the valve now, when you replace it in the future it will cost more money — any amount of putting off will cost more in the future.”

White said St. Louis County implements its own version of the system. Sen. Jill Schupp, who represents part of the county, headlined the opposition to the bill throughout the evening. Schupp said it would allow companies to increase rates without the checks and balances of the commission and increase rates for her constituents, who already pay a surcharge for their version. 

“They will still do the work — it has to be done because they are a monopoly, they have to provide safe, reliable service,” she said. “The question is: Do they get paid in a premier rate case that allows us to open the books to make sure that they are doing everything and not allow them to over earn, or will we let them, twice a year, increase our rates before they go for a rate case?”  

After a couple of hours without floor action, Schupp proposed an amendment that would ensure St. Louis County residents pay one surcharge, not one for each version, and remove a provision allowing companies to carry forward certain costs. The amendment was adopted shortly after midnight, and the bill was perfected shortly after with Schupp the sole dissenting vote. 

White said the catalyst for the bill was the water groups, and he’s worked with the PSC to address concerns the commission brought to him. Christine Page, director of government affairs for Missouri-American Water Company, testified in committee the bill would allow companies to implement gradual rate increases rather than large sums all at once. 

Other witnesses, however, argued the bill would circumvent the commission’s authority to prevent price increases. 

The bill passed through the Senate Commerce, Consumer Protection, Energy and the Environment Committee in February, with two members voting against it. Sen. Eric Burlison, the only Republican to vote no in committee, said he had heard similar concerns from customers.

“The underlying bill isn’t simple,” Burlison told The Missouri Times. “Several consumers shared concerns over rate increases, so I voted against it.”

The bill also changes the competitive bidding process for water corporations; under the legislation, water corporations with more than 1,000 customers would be required to use a competitive bidding process for 20 percent of the corporation’s external expenditures for planned infrastructure projects. The current limit is set at no less than 10 percent. 

At the start of floor debate, White noted the bill had “gone under dramatic changes” before it was “narrowed and focused” on just water and sewer issues. But the first amendment on deck from Sen. Denny Hoskins — allowing annual electric co-ops to hold annual meetings and votes electronically through August 2022 because of the COVID-19 pandemic — expanded the umbrella title to utilities. 

A bevy of amendments were adopted through the evening:

  • Sen. Andrew Koenig offered a provision to change taxing pipes as personal property instead of real property. He said counties had different depreciation schedules and this would make it uniform across Missouri. 
  • Sen. Eric Burlison attached a provision barring political subdivisions from prohibiting utilities from providing a particular type of energy source for customers. 
  • Sen. Jeanie Riddle’s amendment would require real or personal property transferred to a utility company to be assessed by local authorities.