HCS HB 554 -- ELECTRICAL CORPORATION CONSTRUCTION

SPONSOR:  Emery

COMMITTEE ACTION:  Voted "do pass" by the Committee on Utilities
by a vote of 12 to 1.

Currently, electrical corporations are prohibited from making or
demanding charges for service that are based on the costs of
construction in progress on any existing or new facility or any
other costs associated with owning, operating, maintaining, or
financing the property.  This substitute removes the prohibition
for clean baseload generating plants and renewable source
generating facilities and authorizes the Missouri Public Service
Commission to make or demand additional charges for service based
on additional amortizations to maintain the electrical
corporation's financial ratios, if in the commission's judgment,
it would better enable the corporation to cost-effectively
construct a clean baseload generating plant or renewable source
generating facility.  No earlier than three months after the
issuance of a facility review order which, if requested by the
electrical corporation, must include an order approving revised
rates based on preconstruction costs and every three months
thereafter.

The substitute establishes the Missouri Clean and Renewable
Energy Construction Act which requires the commission, for
rate-making and regulatory approvals, to treat any capital costs
and expenses incurred by subsidiary corporations, limited
liability companies, partnerships, or other entities that an
electrical corporation forms to acquire, finance, license,
construct, own, operate, maintain, or decommission a clean
baseload generating plant, as if the costs were incurred directly
by the electrical corporation and the plant itself was owned
directly by the electrical corporation.

The commission must convene a docket within 30 days of the
effective date of the bill to consider the relative merits of
various methods to finance clean baseload generating plants and
renewable source generating facilities.

Procedural requirements are specified for an electrical
corporation filing a project development application and a
facility review order as well as requirements and procedures for
when the commission considers the applications and orders
regarding construction work in progress for both rate-making and
regulatory approval purposes.

The substitute specifies that no court of the state will have
jurisdiction to hear or determine any issue, case, or controversy
regarding any matter which has or could be determined in a
hearing before the commission with regard to the act or to stop
or delay the construction, operation, or maintenance of a clean
baseload generating plant or renewable source generating
facility, except to require compliance with any unmet
requirements.

Any state or regional agency, political subdivision, or local
government, with the exception of the Department of Natural
Resources, is prohibited from requiring approval, consent,
permit, certificate, or other condition for construction,
operation, or maintenance of a clean baseload generating plant or
other renewable source generating facility authorized by the
commission, with the exception of the protection of employees
engaged in the construction, operation, or maintenance of a
facility.  State agencies will continue to have authority to
enforce compliance with applicable state statutes, rules,
regulations, or standards within their authority.

FISCAL NOTE:  Estimated Cost on General Revenue Fund of $0 in FY
2010, $0 in FY 2011, and $236,123 to $393,423 in FY 2012.  No
impact on Other State Funds in FY 2010, FY 2011, and FY 2012.

PROPONENTS:  Supporters say that Missouri has a need for a new
baseload plant and that nuclear and clean coal power are the
cleanest and most cost efficient in the long run.  Funding and
financing is simply not available in this economic environment
for a plant of this type and magnitude without the bill.  It will
actually save Missouri energy consumers in the long run because
they will be servicing the debt on the financing that they would
be liable for after construction is complete through normal cost
recovery ratemaking.  This will be the biggest construction
project in the history of the state and will create thousands of
jobs and stimulate the economy.

Testifying for the bill were Representatives Emery and Walsh;
Ameren UE; Missouri Energy Development Association; Mark Fohey;
Curtis Chick, Jr., Central Region Workforce Investment Board for
Cole County; Empire District Electric Company; Missourians for a
Balanced Energy Future; Ed Robb; Missouri AFL-CIO; Missouri
Association of Realtors; Missouri Association of Municipal
Utilities; Columbia Chamber of Commerce; Missouri Association of
Electrical Cooperatives; United Steelworkers District 11;
Missouri Laborers' Legislative Committee; Harold Crumpton,
Missouri National Association for the Advancement of Colored
People; Dr. Jeffrey King; Laclede Gas; John Houlehan, Jr.,
Missouri Utilities Shareholders Association; and Plumbers and
Pipefitters Local 562.

OPPONENTS:  Those who oppose the bill say that it will place an
undue burden on energy consumers in already hard economic times.
Industries that are already struggling with energy costs will be
forced to cut jobs.  It does not include enough consumer
protections and needs multiple changes.  The bill is too risky,
and other energy investments might be more appropriate at this
time.  Nuclear energy is not safe for people or the environment.

Testifying against the bill were Layle Smith, Noranda Aluminum;
Diana Vulsteyke; Office of Public Counsel; Leann Chilton,
Missouri Energy Group; AARP; Missouri Association for Social
Welfare; Mark Haim, Missourians for Safe Energy; Karen Morse,
Missouri Coalition for the Environment; Missouri Industrial
Energy Consumers; Gary Kajander, Monsanto Company; Sierra Club;
Missouri Retailers Association; Maurice Brubaker; Alvin Hulse;
and Brent Evans.

OTHERS:  Others testifying on the bill say that the intended
results could be accomplished by simply lifting the
preconstruction cost ban on these type of plants and not
including additional language.  A great deal of work needs to be
done on the bill to strike a balance between the need for this
plant and financing and consumer protections.

Testifying on the bill was Missouri Public Service Commission.

Missouri House of Representatives
95th General Assembly, 1st Regular Session
Last Updated November 17, 2009 at 9:25 am