Introduction
During this session, Senator Mike Cierpiot introduced several pieces of legislation in Missouri that could significantly impact the price consumers pay for utilities. These bills address various aspects of utility regulation, including renewable energy, construction costs, reliability standards, and rate structures. Below is an analysis of the key provisions in these bills and their potential implications for consumers.
Key Provisions and Consumer Concerns
1. Construction Work in Progress (CWIP) – SB 186 (Section 393.135 & Section 393.1900, subsection 5(3))
This provision allows utilities to recover costs for new construction projects, such as natural gas-generating facilities, before they are operational. Currently, Missouri law prohibits utilities from charging customers for construction costs until the project is completed. The proposed change would enable utilities to include these costs in rates during construction.
Consumer Concerns:
- Higher Bills: Consumers could face increased utility rates even before benefiting from the new facilities.
- Risk of Overpayment: If a project is delayed or canceled, customers may still end up paying for imprudent expenses.
- Accountability: While the Public Service Commission (PSC) would oversee cost recovery, ensuring prudence in expenditures could be challenging.
2. Integrated Resource Planning (IRP) Reform – SB 186 (Section 393.1900)
The bill proposes reforms to Missouri’s IRP process, requiring utilities to submit comprehensive long-term plans every four years (currently must do this every 16 years). These plans must consider resource adequacy, reliability, cost-effectiveness, and environmental compliance. The PSC has 18 months to review these plans.
Consumer Concerns:
- Transparency: While the reform aims to improve planning, consumers may worry about whether their interests will be adequately represented.
- Reliability vs. Cost: Striking a balance between maintaining reliable service and keeping rates affordable will be critical. Senator Cierpiot contends that many of his proposed changes are due to the current inadequacies of our electric grid. If that is the case, then both the Utilities and the PSC have failed to plan adequately, so why would we believe they would do anything differently under these regulations?
3. Renewable Energy Standards – SB 6 (Section 393.1030)
This provision allows large energy consumers to purchase renewable energy credits directly from the market, potentially exempting them from certain utility compliance costs. It also includes measures to ensure utilities maintain reliable power generation before retiring existing plants.
Consumer Concerns:
- Fairness Issues: Residential customers would bear a larger share of renewable energy compliance costs, while large users would be exempt.
- Reliability Risks: While requiring replacement generation before plant retirements is positive, reliance on intermittent renewable sources poses serious challenges in meeting the state’s energy needs. Wind and Solar energy sources are weather-dependent on their ability to produce electricity. We all remember the disaster Texas citizens faced a couple of years ago when they had an “unexpected” ice storm.
4. Advanced Utility Meters – SB 6 (Section 393.1400(4))
This bill clarifies how utilities should treat customers who opt out of smart meters.
Consumer Concerns:
- Privacy and Health: Many consumers opt out due to concerns about data privacy or potential health risks from smart meter radiation.
- Cost Implications: Utilities may impose additional fees on opt-out customers to cover manual meter reading costs. Like something out of the WEF handbook, push people to give up more privacy or pay a higher price to maintain it.
5. Future Test Year Rate Cases – SB 4 (Section 393.150(3))
The legislation would allow utilities to base rate cases on projected future costs instead of historical data.
Consumer Concerns:
- Accuracy of Projections: There is a risk that utilities could overestimate future costs, leading to inflated rates.
- Consumer Protections: Ensuring robust oversight by the PSC will be essential to prevent unjustified rate increases. (More information on FTY Modeling)
6. State Reliability Mechanism – SB 186 (Section 393.1080)
This measure requires utilities to document their capacity plans annually and ensure they meet regional reliability standards.
Consumer Concerns:
- Cost of Compliance: Meeting stricter reliability standards could lead to higher infrastructure investments passed on to consumers.
- Energy Transition Challenges: As coal plants close and renewable resources expand, ensuring consistent power supply without significant cost increases will be nearly impossible.
Conclusion
While Senator Cierpiot’s legislative efforts aim to modernize Missouri’s utility framework and address challenges like renewable energy integration and grid reliability, they raise several substantial consumer concerns. Key issues include potential rate increases, fair cost distribution, and ensuring accountability for utility expenditures. These changes put all the risk on the consumers while bailing out the state’s utility companies lack of adequate planning. The result will be higher utility costs for Missouri consumers and likely less reliable service. While this is a win/win for the utilities, it could be devastating for Missouri families already overburdened by high energy costs. The Missouri Senate would be wise to abandon all these bills and completely rethink addressing the future energy needs of Missouri consumers as the basis of any needed reforms.
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— ✝️ 🇺🇸 Mike Compton 🇺🇸 ✝️ (@MikeCompton) February 19, 2025