JEFFERSON CITY — Missouri power companies could seek a surcharge for infrastructure projects under a proposal endorsed Wednesday by a Senate energy committee.
Utilities could ask to levy the infrastructure surcharge between formal rate cases before the state Public Service Commission. Regulators would have 150 days to review requests instead of 11 months as in full rate cases. To qualify, improvements must replace, add or extend the life of infrastructure and already be in service.
It could apply to property involved with generation, transmission, distribution, sale or furnishing of electricity but not administrative office buildings or newly built or acquired generating plants. It also could be used for projects needed to comply with government environmental and safety rules.
Proponents have said allowing an infrastructure surcharge would encourage quicker reinvestment in electrical infrastructure, boost reliability and create jobs. They also point to a 2003 law allowing gas and water utilities to request a surcharge for infrastructure costs. Critics have said the legislation would make it easier to increase electric bills and would allow rate increases without consideration of the full financial picture by regulators. They contend water and gas utilities faced a different situation than power companies now do.
A coalition of investor-owned power companies, Missouri Electric Alliance, formed to push the legislation. It includes St. Louis-based Ameren Missouri, Kansas City Power & Light and The Empire District in Joplin.
"This is strong bipartisan legislation that will allow Missouri to update our 100-year-old regulations, invest in our power infrastructure and create thousands of good jobs," alliance spokesman Scott Charton said.
Sponsoring Sen. Mike Kehoe said consumer protections have been added and that he received input from lawmakers, utility regulators, electric companies and others. In addition, Kehoe, R-Jefferson City, is asking regulators to analyze how ratepayers would be affected by $700 million worth of eligible investments by each utility.
He said the committee approval Wednesday allows the process to continue and that he does not anticipate discussion by the full Senate until a response is received from the Public Service Commission.
Sen. Jason Holsman, one of two committee members to vote against the legislation, said Missouri needs investment in aging infrastructure but that the proposal needs further refinement. He said he favors adding an expiration date and a monthly cap to the charge so consumers know by how much their electric bills could increase.
Holsman, D-Kansas City, called the current proposal "far too wide and far too vague."
Under the measure, power companies could seek a surcharge no more than twice every 12 months, and utilities would need to have filed a full rate case within the past three years. How much could be collected from the surcharge between rate cases would be capped.
After levying an infrastructure surcharge for 12 months, utilities would need to reconcile what was collected and submit a proposed adjustment to regulators. If during a full rate case the Public Service Commission disallowed costs that already had been included in a surcharge, power companies would need to offset it plus interest in a future infrastructure surcharge.
The Fair Energy Rate Action Fund, an opponent of allowing a surcharge, has estimated the proposed cap could allow investor-owned utilities to collect a total of up to $472 million.
The House Utilities Committee scheduled a public hearing next week on similar legislation. House Speaker Tim Jones said this past week that the state needs more energy efficiency but that he is cognizant of concerns raised by consumers and other ratepayers.
"I think it's good to have the discussion. The bill needs a lot of work," Jones, R-Eureka, said.