MBEF Supports Special Legislative Committee to Conduct Public Hearings on Disparity in Electric Rates
JEFFERSON CITY – Missourians for a Balanced Energy Future (MBEF) has announced its support for state Representative Jay Barnes’ proposal to appoint a special committee on the disparity in electric rates paid by different classes of electric consumers. Barnes filed the proposal on Monday as an amendment to House Bill 613. In Missouri, large industrial corporations pay a rate for their electricity that is about half the rate paid by residential customers and small businesses.
“Families and small businesses are being forced to pay a higher rate for their electricity so that large industrial corporations – even those that are owned by out-of-state hedge funds and holding companies – can get a lower rate,” said Irl L. Scissors, executive director of MBEF. “There are serious questions about whether the disparity in electric rates has grown too large and inequitable, and we need to take a closer look.”
In Missouri, total electricity costs are divided up among several rate classes, including residential customers, small businesses and large industrial users, as well as other classes. Rates for each class are set through Missouri’s regulatory process. Lobbyists and lawyers representing various interest groups – including big industrial corporations – push for rates that are advantageous to their clients. When one class wins a comparatively lower rate, the other classes must pay a higher rate to make up the difference.
“This issue deserves public debate,” Scissors said. “We support Rep. Barnes’ call for public hearings so we all can learn more about whether these rate disparities are justified or see what changes should be made to assure that the rate structure is fair.”
The difference in cost for electricity between rate classes has been receiving increased attention lately. Earlier this year, Barnes and 46 co-sponsors in the Missouri House introduced legislation that requires Noranda Aluminum, a southeast Missouri aluminum smelter owned by an out-of-state hedge fund, to maintain at least 200 jobs in Missouri or forfeit its reduced electric rate. And MBEF recently released a poll showing that 68 percent of Missourians say that large industrial corporations should not be allowed to continue paying half the rate for electricity that small businesses and residential customers pay.
Supporters of the rate disparity often justify the lower rates for these big corporations by saying these corporations create jobs. But opponents note that most new jobs are created by small businesses, and giving the break in rates to small businesses and families rather than big industrial corporations may be a more effective job creation strategy.
