ICYMI: Yesterday, A Missouri Senate Committee rejected legislation to allow a vote on deregulating the state’s electricity market which would have raised rates for consumers if passed. The original piece, written by Jaclyn Brandt, can be viewed here.
A Missouri Senate Committee on Thursday rejected legislation that would have let voters decide whether to deregulate the state’s electric energy market.
The Missouri Senate Committee on Transportation, Infrastructure and Public Safety voted down Senate Joint Resolution (SJR) 34. The constitutional amendment stated that, if approved by voters in November 2020, the General Assembly would be required to pass legislation to establish an open and competitive retail electric market in Missouri.
Stakeholder groups said the bill would have had dire consequences for Missouri ratepayers and the state economy.
“If investor-owned electric utilities were deregulated through an action such as SJR 34, your local utilities like Ameren Missouri and Evergy would be required to divest all of their generation assets, meaning Missouri’s coal-fired and natural gas facilities, the Callaway Energy Center, and many others would be sold to out of state energy companies and hedge funds – entities that have zero relationship with Missouri communities and would only be looking for bottom-line savings for their millionaire and billionaire owners,” said Irl Scissors, executive director of Missourians for a Balanced Energy Future.
“While the divestment would be guaranteed to occur, there is no guarantee these assets would sell on the open market leaving significant potential for plant closing, massive job loss, and a major hit to Missouri’s entire economy,” he added.
According to Scissors, Missouri’s average residential customer rates were the fifth-lowest in the country, based on data from the U.S. Energy Information Administration (EIA) in October 2019.
Bill sponsor state Sen. Doug Libla (D-Poplar Bluff) said he introduced the legislation because of an increase in energy bills in Missouri.
“In the last 10 years, Missouri’s rates have increased over 40 percent,” he said. “The 17 states that have deregulated in the last 10 years, their rates have increased 7 percent. So Missouri’s rates have increased almost six times as much as deregulated states.”
Sen. Libla said the higher rates are due to a lack of energy choice in the state. “Currently, in a monopoly environment, consumers have no choice where they can buy their electric,” he said. “But monopolies are like buggy whips, they’re just kind of like … out of style. So, you have a lack of innovation. Consumer choice is the big word.”
However, Scissors noted the negative impact retail electric choice could have on electric customers.
“Missouri’s ratepayers would face the brunt of the backlash should our electricity markets be deregulated. You would see rate increases and fluctuations no longer administered by the Public Service Commission,” Scissors explained. “Ratepayers would no longer have a Missouri governing body as oversight and any recourse would have to be sought from the new governing entity, the federal government.”
He also added that, if the law were to pass, state consumer protection measures would no longer be in place. This would allow out-of-state companies with no incentive for low rates to enter the energy market in Missouri.
“Missouri’s investor-owned utilities have long-term infrastructure plans in place currently like Ameren’s Smart Energy plan,” Scissors said. “These investments would be halted and would remain in flux for the foreseeable future, again costing jobs and millions of dollars in economic activity around the state.”
In 2018, the Missouri Assembly passed SB 564, which would allow electric corporations to apply to the Public Service Commission to approve rate schedules authorizing periodic rate adjustments outside of general rate proceedings due to changes in customer usage as a result of weather and conservation.
Ameren Missouri filed a request with the Missouri Public Service Commission to reduce rates by $1 million. Ameren said its Smart Energy Plan was made possible by legislation passed by the Missouri General Assembly.
Ameren Missouri expects more than $5.3 billion in investment in more than 2,000 electric projects over a five-year span to help improve reliability of the Missouri grid.
“We are delivering on the promises in our Smart Energy Plan as we remain focused on improving reliability by investing in our system while keeping rates stable and predictable,” said Michael Moehn, the president of Ameren Services and former chairman and president of Ameren Missouri, in a statement at the time. “These investments are providing real value for our customers, creating an energy grid that is more reliable and more resilient to severe weather. These upgrades also allow for the integration of more solar and wind energy as we transition to cleaner energy.”
Ameren Missouri’s goal is to reduce carbon emissions by 80 percent between 2005 and 2050, as well as to roll out new smart meters in 2020.