KC Star: Bill backed by KCP&L in Missouri would allow frequent, but possibly smaller, rate increases
Missouri utilities could raise customers’ rates every year — and with less control by regulators — under a bill they’re advocating in Jefferson City.
In return, proponents say, those increases will be more predictable and subject to yearly limits. Electricity customers in Kansas City, for example, wouldn’t face another rate spike like the 11.7 percent boost they got last September from Kansas City Power & Light.
But opponents say that customers would almost be guaranteed an increase every year, and that the bill’s yearly limits have too many holes in them to really protect consumers.
For decades, utilities have had to submit detailed rate requests and justify their costs in months-long proceedings before the Public Service Commission. The regulators then granted what they thought were “reasonable and just” rates, usually covering some but not all of the request.
The new proposal, sponsored by Sen. Ryan Silvey of Kansas City, would amend Missouri’s 1913 regulatory law so that utilities instead could expect quicker and more predictable returns on their investments in power plants, transmission lines and other infrastructure.
They could choose to submit such expenses for the past year and, unless the regulators proved the costs “imprudent,” expect to get a set return on those investments.
“Our hope is that we can come up with a modern system that works for today’s issues,” Silvey said. “A lot has changed in the utility space and how we utilize electricity in the last 103 years.”
But many consumer advocates and industrial energy users oppose the bill, saying its formula approach would remove much of the PCS’s ability to scrutinize rate requests and control rate increases.
“There’s nothing in this bill to keep rates from going up every year,” said James Owen, the state’s acting public counsel, whose office represents consumers in utility cases.
Advocates note that the bill caps increases in utility revenue to 2 percent for each of the first two years, no more than 4.75 percent in any one year after that, and a rolling average of 3.5 percent. Some consumer advocates like that aspect of the plan.
