Missouri residents may notice their utility bills rising and wonder if it is due to recent state legislation, specifically Senate Bill 4 (SB 4). However, the recent rate increase is more likely due to the 2018 Senate Bill 564 (SB 564). These laws, intended to modernize utility infrastructure and unbelievably promote renewable energy, follow a troubling trend: new legislation often expands on prior measures, frequently eroding citizens’ financial security under the guise of progress. This article breaks down the key provisions and their impact, illustrating how utility companies benefit while households and small businesses bear the cost.
Delayed Costs Hit Future Ratepayers Harder
One significant policy, Plant-in-Service Accounting (PISA), allows utility companies to defer 85% of depreciation and returns on infrastructure investments over 20 years. Introduced by SB 564 with an end date of 2028, SB 4 extends this to 2035, with the program lasting until 2040. This shifts the burden to customers, who will face larger bills. SB 4 also adjusts financial baselines and reduces grid modernization requirements, potentially leading to unchecked overinvestment, further straining pocketbooks down the line.
Renewable Energy Goals Come with Hidden Costs
SB 564 mandated that utilities achieve 15% renewable energy, including 2% solar, by 2021, funded through the Renewable Energy Standard Rate Adjustment Mechanism (RESRAM) with solar investments and rebates. SB 4 builds on this by allowing larger customers to avoid some costs through direct renewable purchases and offering tax breaks for certain solar projects. However, these adjustments place the financial load on residential customers, who see higher rates without proportional benefits, perpetuating a cycle of cost-shifting that favors utilities.
Frequent Rate Increases Reduce Predictability
SB 564 permitted annual rate increases of up to 2.5% for infrastructure and other factors, with limits on overages. SB 4 expands this to gas, water, and sewer utilities, using future projections and including ongoing construction costs in rates. While aimed at funding upgrades, these frequent adjustments make budgeting difficult for families, as rates rise unpredictably, chipping away at financial stability.
Incentives Favor Big Business Over Households
To attract businesses, SB 564 offered up to 40% discounts on electricity rates for significant energy users, spreading the cost across all customers. SB 4 extends this to gas utilities, further subsidizing industrial growth at the expense of smaller households and local businesses. This policy continues the pattern of prioritizing corporate gains over individual financial relief.
Long-Term Planning Locks in Higher Rates
SB 4 enhances planning requirements with 20-year utility plans and reserve capacity mandates. While ensuring service reliability, this involves costly replacements and financial tools like securitization, locking in higher rates for years. This long-term approach prioritizes utility stability, often at the cost of immediate consumer affordability.
The Bigger Picture
SB 4 and SB 564 exemplify how legislation builds on previous frameworks, expanding their reach and timelines while placing additional financial strain on Missouri citizens. This trend undermines economic liberties, as rising utility costs erode household budgets to bolster utility profits. Legislative critiques highlight insufficient oversight, suggesting that without reform, this cycle will persist. Residents may wish to engage with local representatives or review utility commission reports for further insight. As these policies evolve, balancing utility needs with consumer rights will be crucial to halt the erosion of financial well-being.