Legislators oppose the Noranda Bailout!
From Senator Mike Kehoe 6th District
With only four weeks remaining in the legislative session, both the pace and the volume of legislation being heard is increasing. As is the case every year, budget discussions are at the forefront. In the week since the senate passed its version of the Fiscal Year 2016 budget, there has been a great deal of conversation with the house, stakeholders, and citizens. This is as it should be with a budget in excess of $26 billion. The next formal step in the process is for the house and the senate to reconcile the differences between their versions in conference committees.
In previous reports I have indicated the budget process began with a goal of passing a budget that could be sent to the governor by April 17th so that he would have to make veto decisions while the legislature is still in session. While a worthy goal, it is far more important that the legislature pass a budget using your tax dollars responsibly, makes investments in priority areas, and helps those Missourians who cannot take care of themselves. The constitution requires the budget be completed by the Friday May 8th, and this is the timeline most important to me. The appropriations process is far ahead of schedule in comparison to previous years, and we have time for conference committees to do their work and meet the constitutional deadline.
This week I was very pleased help pass HB150 which makes changes to Missouri’s unemployment insurance program. I have been advocating for these changes for the last two years. The governor vetoed similar legislation last year, but his veto did not eliminate the necessity for these changes. Missouri is the only state in the nation that has had to borrow to cover unemployment claims in each of the last five recessions.
HB 150 has three main components. First, it ties the length of unemployment to the unemployment rate. The lower the state’s unemployment rate, the shorter the length of time unemployment can be collected. Similarly, the higher the unemployment rate, the longer unemployment can be collected up to the state maximum of twenty weeks. Second, HB150 raises the cap on the unemployment trust fund so that the fund is not depleted as quickly. Finally, HB150 requires the state to consider bonding any future outstanding debt balances to the federal government to eliminate escalating penalties on employers. With the addition of three amendments relating to the calculation of the unemployment rate, protection for those who buy businesses, and preventing the double-dipping of benefits, the bill was made even better. I look forward to the house quickly passing the revised version of HB150 and sending it to the governor for action.
This week the senate also passed an amended version of the house “transfer bill”, the education bill that has to do with student transfers and other education initiatives that the governor vetoed last year. I am grateful to Representative David Wood for his work and leadership on this effort. The previous version the senate debated earlier this year was scuttled as a result of several costly amendments. Representative Wood’s HB42 is the by-product of months of discussions and a great deal of compromise. It is critically important that all Missouri children have the opportunity to receive the best possible education and not be tied to a failing school or district. This bill now goes back to the house for additional consideration.
Last week I discussed Representative Rocky Miller’s resolution encouraging the EPA and the Corps of Engineers to withdraw their proposed rule relating to waters of the United States. This proposed rule would be devastating to private property ownership and would exponentially expand the regulatory authority of the federal government. This week the senate gave initial approval to SB476 which, among other things, removes the term ‘waters of the United States’ from the definition of waters of the state. This change clarifies that Missouri is responsible for regulating our own water quality and neither needs nor wants continued overreach by the EPA.
On Tuesday I was very disappointed to see the governor attempt to influence the proceedings of the Public Service Commission by issuing a biased press release on behalf of one party in a proceeding. In doing so, the governor has sided with one company at the expense of rate-payers who will foot the bill for the sweet-heart deal the governor is endorsing. That this company has given the governor numerous large donations may be purely coincidental, but I find that difficult to believe. Instead it appears to be another case of a term-limited governor, facing a mundane and ordinary legacy and less than two years remaining in office, desperately trying to remain relevant. I have sent a letter to the governor requesting that he withdraw his support for this special deal that benefits only one company and instead provide leadership by working with the senate to craft an economic development package that benefits all businesses while protecting Missourians.
Turkey season begins on Monday. With a single exception, I wish each of you hitting the woods the best of luck. Be safe and enjoy God’s great creation. For the lone exception I still wish for safe and enjoyable hunts, but I cannot wait to hear his lamentations and exaggerations of close calls, unlucky breaks, and the myriad of other excuses he will weave together in a fictional web to explain his lack of success.
My purpose and my intent is to serve the constituents of the 6th Senatorial District. If you are in the capitol during the coming weeks and months, please stop by my office in Room 220.
Read Senator Kehoe’s letter here
Letter from Representative Genise Montecillo 92nd District
April 17, 2015
Hon. Robert S. Kenney
Missouri Public Service Commission
200 Madison Street
Jefferson City, MO 65102-0360
Dear Chairman Kenney:
I’m writing on behalf of my constituents to express my sincere concern about the nearly $25 million annual rate shift for Noranda Aluminum. My concerns are twofold.
First, it is simply unconscionable to ask the people of my district to pick up someone else’s electric bill, especially one that is nearly $25 million a year. This rate shift is unfair to my constituents, many of whom are on a fixed monthly income. My neighbors are veterans, disabled individuals and the elderly, who simply cannot afford to pick up the tab for a single company.
The fact is that the millions of customers have had no voice in this matter and they are the ones being asked to incur a rate shift in order to leverage what amounts to an economic bailout for Noranda, and for which they receive no value.
Second, I believe that an economic development package should be under the purview of the Missouri General Assembly and I sincerely ask that you do not set an economic development precedent by voting to give Noranda a reduced rate based strictly on economic matters. This type of economic development package should be borne by the entire state, not just Ameren Missouri customers, most, if not all of whom do not live near or work at Noranda.
If the Commission chooses to engage in this type of social engineering, then I hope you will be prepared to make similar adjustments to benefit my constituents, such as my veterans, seniors, disabled and poor, who sincerely need a break on their utility bills in order to meet their household expenses rather than bailing out CEO’s receiving obscenely large bonuses.
Thank you for your consideration in this matter.
Sincerely,
Representative Genise Montecillo
92nd District
Letter from Senator Jeanie Riddle, Senator Ron Richard, Senator Mike Kehoe, Senator Brian Munzlinger, Senator Ed Emery, Senator Bob Dixon
The Missouri Public Service Commission recently announced its intention to reconsider its decision wherein it denied an electric rate decrease to Noranda Aluminum. This announcement came almost simultaneously with a press release from Governor Nixon supporting the subsidy for Noranda. The rate decrease being considered by the Public Service Commission would lower Noranda’s electric bill by more than $25 million per year. That decrease would be transferred to all other customers of Ameren Missouri who would pay more so that Noranda could pay less.
this proposed rate decrease is unlike other rate settings by the Public Service Commission, iin that the decrease is not based upon the traditional factors: the cost of generating and transmitting electricity. It is based upon Noranda’s assertion that in order to remain in Missouri, Noranda requires a subsidy. This is essentially an economic development subsidy based upon social and economic considerations rather than an electric rate based upon the cost of electricity.
We oppose this rate shift for the following reasons:
- It is unfair that the vast majority of Ameren Missouri electric customers should be forced to pay higher electricity rates to subsidize Noranda. Many thousands of businesses, senior citizens and people with fixed incomes should not be asked to bear this burden.
- The Public Service Commission is an unelected board in the executive branch. A decision regarding a new multi-million dollar economic development program should be made by the elected members of the General Assembly. A decision by the Commission to provide a below cost-of-service subsidy of this nature represents a large expansion of governmental power and a significant transfer of power from the elected legislative branch to an unelected executive body.
- Unlike a bill passed by the legislature, which would contain various safeguards, a rate shift of this type can contain no ratepayer protections. Noranda is controlled by a huge hedge fund in New York. There is nothing to prevent it from simply taking the money out of Missouri.
- The Governor issued a press statement simultaneously with the announcement of reconsideration by the Public Service Commission. These two events happening so closely in time is an eloquent articulation of how simple it would be for the Governor to orchestrate other similar subsidies by the Public Service Commission.
- If the Commission chooses to engage in this type of social engineering, it will be hard pressed to resist future requests to other deserving rate paying groups, businesses and organizations. For example, it it’s permissible to take money from other rate payers to give to Noranda, how can it be wrong to do the same for churches, veterans, senior citizens and others?
We, the undersigned, hope the Public Service Commission will rethink it’s announcement and stick with its original, well-reasoned decision on the issue.
Senator Jeanie Riddle
Senator Ron Richard
Senator Mike Kehoe
Senator Brian Munzlinger
Senator Ed Emery
Senator Bob Dixon
Read the Letter to PSC re Rate Shift here
