Since my first year in the Senate, I have fought to protect customers when legislation has been filed making it easier for utility companies to raise your rates. This year isn’t any different as Senate Bill 564 was the first bill to make it to floor. It has received around four hours of debate with the utility companies claiming they need the bill to make significant investments in infrastructure and customers saying it only makes it easier for the utility to raise rates. Again, I am siding with customers.
But this year, I am taking a different path; one that ensures the true infrastructure needs of the utility are met while adhering to my principles of protecting customers. It is for these reasons and in the spirit of true Senate compromise that I filed Senate Bill 972.
Senate Bill 972 takes the key elements of this year’s utility legislation and adds consumer protections to it. For example, I have been asking the utility companies to demonstrate there is a true need to replace the infrastructure. For this reason, I included a needs test for the utility to opt into the program.
A good example of how this would work is the building of a power plant by Kansas City Power and Light (KCP&L). KCP&L provided a 42-page document to customers proving there was a need for the plant to be built. KCP&L and customers then came to the table to hammer out the details to get the plant built.
Over the past decade, KCP&L’s rates have increased dramatically, due to the agreement, but it shows that customers will step up to ensure our utility companies stay strong when there is a demonstrated need. However, what customers can’t support is extravagant spending that does nothing to improve service to the customer. The needs test will focus any increased spending on the demonstrated need of the utility.
My bill also caps rate increases for utilities opting into the program at 2 percent without any deferrals. The bill currently on the floor is a soft cap of 3 percent and would allow the utility to capture anything over the 3 percent with interest at the end of the program period. One of the arguments for the current bill on the floor is it will make rates more predictable and eliminate rate spikes. That argument doesn’t hold because the deferral will lead to one huge rate spike at the end of the program. Our cap fixes that problem.
I also believe that the 3 percent cap it set too high because it doesn’t include the tax cut recently implemented at the federal level. I believe the utilities should return that tax savings back to customers. My 2 percent cap takes this into account but could change once we determine the tax implications on the utility.
I also require the utility to spend 20 percent of their investment on the projects deemed as a critical need. If we are going to incentivize the utility to address their infrastructure needs, we must also ensure the needs are addressed.
The current bill on the floor is silent on this issue. They say it is about grid modernization, but simply hope that the incentive spurs the utility to invest in its needs. I put those words into action.
Finally, the bill establishes the Missouri Energy Freedom Act. Currently, businesses are not allowed to enter into contracts directly with non-utility energy service providers, such as wind or solar farms. The Missouri Energy Freedom Act allows companies to enter into contracts called power purchase agreements (PPAs) which facilitate the procurement of energy without significant capital expenditures or risks associated with operating a power generation system.
This legislation also allows the owner of a renewable energy facility to sell electricity to a customer of an electrical corporation. In order to take advantage of this, an electrical company will submit a tariff for approval establishing a portfolio of programs. These programs will be offered until the sales from renewable energy contracts exceed 5 percent of the company’s total retail sales.
Senate Bill 972 is my attempt to solve the electric utility issue once and for all. I believe it encourages added investment focused on the infrastructure needs of the utility while ensuring customers are protected. I will keep you informed as the bill moves through the process.
Bingo games are a social staple in communities throughout Missouri, especially for our service organizations. I believe Senate Bill 697 will make it a little easier for these organizations to staff their events and promote bingo games to the public. Since the provisions about bingo are in the Missouri Constitution, this issue must jump over two hurdles before becoming law. It will have to pass the legislature and receive approval from Missouri voters. SB 697 and SJR 25 were heard in the Missouri Senate’s Progress and Development Committee this week and will now move to the Senate Floor for discussion.
The Missouri Senate continues to be placed in an awkward position in regards to gubernatorial appointments. The appointment process, as set forth in the Missouri Constitution, clearly indicates that the Missouri Senate must provide advice and consent for all gubernatorial appointees. The philosophy of this policy is to ensure the individuals who serve on our boards and commissions are qualified, independent thinkers who will make well-informed decisions.
The manner in which the governor has appointed individuals to the Board of Education, the Missouri Housing Development Commission and the Missouri Veterans Commission has been especially concerning to the Senate. This week, the Senate did not to confirm three candidates for the Missouri Housing Development Commission, meaning these appointees are now banned for life and unable to serve on this board. This decision does not reflect poorly on the candidates themselves, but rather reflects on the inappropriate way in which their appointments were handled by the governor. These constitutional processes must be upheld in order to protect the checks and balances put forth by our forefathers.