Column: Wall Street Games Have No Place in Missouri’s Electric Rate Decisions
A column by Executive Director Irl Scissors
Missourians for a Balanced Energy Future
627 words
You didn’t have to see the movie The Wolf Of Wall Street to know it was about the greed that made New York executives rich while sinking the US economy and hurting a lot of families.
It turns out that a similar mentality about taking advantage of consumers could be happening right here in Missouri with our electric rates.
A company based in Tennessee, Noranda Aluminum, has a smelter in New Madrid, Missouri. They have the lowest electric rates of any Ameren Missouri customer in the state by more than 60 percent. In fact, they pay less for electricity than it costs to provide them with electricity.
But Noranda wants to pay even less.
Noranda has asked the Missouri Public Service Commission to force Ameren Missouri to reduce their rates by another 25 percent. This reduction for Noranda would shift more than a half of a billion dollars onto every other Ameren Missouri customer.
Why would Noranda do this? They claim they’re facing hard economic times, but they’re not telling the full story.
Noranda reported to their Wall Street investors in March that they were the picture of financial health, recording a profit in 2013 and even paying dividends to shareholders.
Their largest investor, which controls all of Noranda’s financial decisions, is Wall Street hedge fund, Apollo Holding Corporation. Apollo is doing very well. So well that their CEO made over $500 million last year, raising his rank on the Forbes billionaires list from 299 to 240.
Apollo initially invested $211 million in Noranda, but over time has paid itself back by frequently selling Noranda stock to the tune of $554 million, which is almost a 400% return on investment. Talk about a good investment. Their latest announced plan is to sell 10 million more shares with no plan to reinvest any profits back into the aluminum company.
Does Apollo want to see Noranda survive or simply continue to take money out like an ATM?
Missouri electric consumers are about to find out. If Noranda’s rate shift request is granted by the PSC, we will be the ones paying to keep Noranda financially viable only to see Apollo continue to take money – our hard earned money – out of Noranda.
Some Missouri businesses aren’t waiting to know whether that will happen.
The cities of St. Louis, Ballwin and O’Fallon and businesses like Walmart, Ameristar and River City Casinos, River Cement and Continental Cement have all publicly expressed strong concern and opposition to the PSC, because this rate shift will be particularly hard on businesses and municipalities that use a large amount of electricity. In fact, they could face tough business cut backs of their own.
Time is short to protest this massive rate shift to Missouri electric consumers. Objecting through letters and motions to intervene are the only recourse Missouri residents and businesses have because Noranda’s request was filed in an expedited timeline, meaning no time for public hearings. Furthermore, the magnitude of such a rate shift constitutes a massive corporate subsidy and the PSC is not the appropriate forum to request such economic relief.
So, if this is truly about economic relief for Noranda, then they shouldn’t mind taking this debate to Missouri’s General Assembly. There, Missouri residents and businesses have full representation. Missouri Senators and Representatives can ask questions about the true financial health of Noranda Aluminum and gain the assurances necessary to know Missouri consumers will not be the next victims of Wall Street games.
The country watched as bad actors on Wall Street found a way to take advantage of consumers once. Here in Missouri we can stand up against this rate shift request by telling our state legislators to get involved in this process and demand a debate about this rate shift request.
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Missourians For A Balanced Energy Future | moenergyfuture.org | @MBEF | facebook.com/moenergyfuture
