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Governmental accountability in utilities legislation and gubernatorial appointments

Last week I participated in a 24-hour filibuster over Senate Bill 564, and this filibuster continued this week. I take filibustering very seriously because I recognize the toll this takes on Senate staff and the importance of legislation moving forward through the legislative process. In this case, however, I believe the citizens of Missouri are being sacrificed to benefit large utility corporations who have lobbied for this legislation. Utility policy is very complex and it is crucial to separate fact from rhetoric.

For the last three years, utility companies have spread the message of the need to modernize the grid. This year is not any different. In fact, this year’s bill, SB 564, has been sold to senators and Missourians as a bill that modernizes the grid and creates jobs; in reality, it only gives more power to the utility monopoly in our state.

SB 564 does not require a single dollar of added investment in the grid. My belief is simple. If we need to modernize the grid, we should create incentives intended to promote grid modernization and hold companies accountable that take advantage of those incentives. If the goal of this bill is grid modernization, we should ensure customers receive the most bang for their buck.

As SB 564 is currently written, a utility company entering the program receives the incentive on 85% of all investments made minus five specific offsets. This means that ratepayers will be subsidizing the amount the utility is currently spending to make its authorized rate of return. The question is simple; should customers subsidize investments that are already profitable to the monopoly utility? I don’t believe they should, and for this reason, I am fighting for the incentive to only apply to the added investment the utility makes for grid modernization.

Senate Bill 564 is supposed to promote jobs and modernize the grid, but there is no language in the bill that states new jobs must be created in Missouri. Instead, companies can hire in any surrounding state. There is also no language in this bill mandating companies to invest in grid modernization. The bill will require companies to submit a 5-year development plan, but it does not include any language requiring the utility companies to actually follow through on their proposed plan. In fact, under this legislation, companies can actually spend less on grid modernization than they currently do. Additionally, SB 564 does not define grid modernization, so there are no standards listed in the legislation that companies are required to meet.

Another problem with SB 564 is the limitations it places on the Public Service Commission’s ability to regulate large utility companies and protect consumers. Currently, the Public Service Commission has the authority to intervene when rates change, but under this legislation their ability to regulate the rates that companies charge consumers is reduced. The bill does not require Public Service Commission approval for the utility company to use the program for the first five years. This means there is no oversight to ensure the utility company actually needs the program to make additional investments before entering the program.

The Public Service Commission plays an important role in ensuring utility companies operate in a prudent manner. These companies have a monopoly in Missouri; they are not held accountable in the marketplace by competitors. The Public Service Commission provides oversight and accountability while ensuring consumers are getting the best service at the best rate while also allowing for healthy profits for utilities. Customers should be assured that nothing we pass will diminish the Commission’s oversight role of protecting their interests.

It is also important to note, the temporary reduction of electrical bills because of the federal Tax Cuts and Jobs Act will occur with or without SB 564. In other words, the only benefit to consumers through this bill will occur without it, but the benefits to monopoly utility companies at the expense of consumers will only happen though the passage of this legislation.

Investor-owned utility companies are obligated to their shareholders, not consumers. I serve the citizens of my district and the citizens of Missouri, not special interests or monopolies. The utility monopoly must be held accountable and should not dictate policies that benefit themselves while increasing the burden on citizens throughout Missouri. It is our responsibility as senators to represent the people of our districts and to ensure that Missouri’s utility policy serves Missourians first.

Senate Bill 794 would require the governor to inform the Missouri Senate, in writing, of any appointments to state boards or commissions made while the General Assembly is not in session. After appointment and notification, the governor will also be prohibited from withdrawing or rescinding the appointment, except in the case of charges of malfeasance, misfeasance or nonfeasance. Additionally, only appointees that have been approved by the Missouri senate will be counted and recognized for establishing a quorum. No official actions may take place unless a majority of the board or commission, all of whom have received the approval of the Missouri Senate, votes therefor. In addition, this bill addresses issues with the State Board of Education while also ensuring the same standards apply to other state boards and commissions.

The Missouri Senate’s Government Reform Committee approved the proposal and it now moves to the Senate for perfection and debate.

Visiting my office this week from the district were Nancy Lynch, Glenda Pulley, Diana Pattengill, Stephen Slinkard, G. Kay Wampler, Shirley Poorman, Martha Resinger, David Bova, Rick Rudloff, Terry McDaniel and Mike Graham. I always appreciate hearing your comments, opinions and concerns.

Please feel free to contact me in Jefferson City at 573-51-4008. You may write me at Gary Romine, Missouri Senate, State Capitol, Jefferson City, MO 65101; or email me at gary.romine@senate.mo.gov; or www.senate.mo.gov/romine.

State Sen. Gary Romine

State Sen. Gary Romine

This report was filed Feb. 16, 2018

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