HCS HB 2279 -- UTILITY REGULATIONS AND SALES OF SCRAP METAL

SPONSOR:  Emery (Wright, 159)

COMMITTEE ACTION:  Voted "do pass" by the Special Committee on
Utilities by a vote of 6 to 5.

This substitute changes the laws regarding utility regulations
and the sale of scrap metal.  In its main provisions, the
substitute:

(1)  Authorizes the Missouri Public Service Commission to grant
approval, which will have the same effect as approval granted
prior to construction of an electric generating facility, to an
existing electric generating facility if the commission
determines that the approval is necessary or convenient for the
public service.  The power to grant this retroactive approval
expires on August 28, 2009.  Upon enactment of the substitute,
the commission will be required to hold public hearings before
approving the construction of future electric generating
facilities and consider county zoning and planning requirements
in its decisions.  The commission must publish findings showing
that it has complied with these requirements prior to approving
the construction of an electric generating facility;

(2)  Requires purchased gas adjustment rates to include the gas
cost portion of net write-offs incurred by a gas corporation in
providing service to its customers as part of rate adjustments in
the purchase price of natural gas approved by the commission.
These write-offs will not count as tariff increases for the
purpose of the gas corporation's revenue notification
requirements to cities and counties in Section 393.275, RSMo.
The requirement of holding a general rate proceeding every three
years in order to maintain or obtain commission approval of an
Infrastructure System Replacement Surcharge will be extended to
five years;

(3)  Requires purchasers of scrap metal to keep a record of each
transaction including a copy of a federal or state-issued form of
identification from the seller, the date and time of delivery,
and a description and weight of all metals purchased.  Scrap
metal includes any aluminum, copper, brass, or bronze wire;
cable; pipe; tubing; bar; ingots; rod; fitting; fastener; or
farming material.  Records are required to be kept for a minimum
of 24 months and must be available for inspection by law
enforcement.  Any person violating this provision will be guilty
of a class A misdemeanor.  Transactions not exceeding $50 or
transactions between scrap metal dealers with fixed business
locations are exempt from the record-keeping requirement;

(4)  Requires scrap metal dealers to make any payment over $50 by
check, electronic transfer, or any other method in which a
financial institution maintains a record of the transaction;

(5)  Prohibits scrap metal dealers from purchasing metal beer
kegs of six gallons or more unless purchasing them from the
brewer or its representative.  Any person violating this
provision will be guilty of a class A misdemeanor;

(6)  Prohibits scrap metal dealers from purchasing items such as
manhole covers, street signs, bleachers, or guardrails that are
identifiable as belonging to a political subdivision, electric
cooperative, or utility.  Any person violating this section will
be guilty of a class B misdemeanor;

(7)  Specifies that any person who steals or appropriates wire or
other devices that are associated with transmitting
telecommunications or conducting electricity will be guilty of a
class C felony;

(8)  Specifies that any person who steals or appropriates any
property on the premises of an electric cooperative or municipal
utility or utility regulated by the commission will be guilty of
a class D felony;

(9)  Allows electric suppliers to trim, remove, and control trees
and vegetation that threaten the safe and reliable operation of
electrical service.  Permissible distances from power lines for
removing trees are specified based on the voltage of the power
line.  Any tree that actually threatens the power supply may be
trimmed or removed after a 14-day notice to the owner even if the
tree is not within the recommended distance guidelines unless the
electric supplier determines that removal of the tree is
immediately necessary or the electric supplier is trimming or
removing trees following a major weather event or other emergency
situation.  If any tree which is trimmed by an electric supplier
dies within three months as a result of the trimming, the owner
may request in writing that the electric supplier remove the tree
at the supplier's expense.  The electric supplier must respond to
the request within 90 days;

(10)  Creates penalties for corporations, persons, and public
utilities that violate any law, order, decision, decree, rule,
direction, demand, or requirement of the commission relating to
federally mandated natural gas safety standards.  Municipalities
that own gas plants are only liable for violations of natural gas
safety laws, rules, and orders.  The maximum penalty per
violation will be $15,000, and the maximum penalty for multiple
violations or a continuing violation of the same rule will be
$150,000; beginning January 1, 2015, the maximum penalties will
be $20,000 and $200,000; beginning January 1, 2025, the maximum
penalties will be $25,000 and $250,000; beginning January 1,
2035, the maximum penalties will be $30,000 and $300,000; and
beginning January 1, 2040, the maximum penalties will be $40,000
and $400,000.  In determining penalty amounts, the commission may
consider the degree of culpability, prior violations, the effect
of the penalty on operations, good faith efforts at compliance,
ability to pay, and any other matters deemed relevant.  The acts
and omissions of officers, agents, and employees of any
corporation, person, public utility, or other owner of a gas
plant will be considered the acts or omissions of the gas plant
owner; and

(11)  Requires a regional electric cooperative that provides
service to two or more municipalities within Missouri to allow
the municipalities to appoint at least four members to its
governing board.  Appointments will be made by majority vote of
the mayors of the municipalities served by the cooperative, and
the individuals appointed will have the same rights and benefits
as other members of the board and be subject to Section 394.160.
The provisions of the substitute may be enforced by an injunction
prohibiting any regional electric cooperative who fails to comply
with any of the requirements of the substitute from operating
within Missouri.

FISCAL NOTE:  Estimated Cost on General Revenue Fund of $0 to
Unknown - Less than $100,000 in FY 2009, FY 2010, and FY 2011.
Estimated Income on Other State Funds of $0 to Unknown in
FY 2009, $0 in FY 2010, and $0 in FY 2011.

PROPONENTS:  Supporters say that the bill will eliminate
unnecessary rate cases by allowing Infrastructure System
Replacement Surcharges to remain in place for five years without
a rate case instead of the current standard of three years.  Bad
debt may be treated as a cost of providing gas and recovered by
gas utilities.

Testifying for the bill were Representative Wright (159);
Missouri Energy Development Association; Missouri Gas Energy;
Laclede Gas Company; AmerenUE; and Empire District Electric
Company.

OPPONENTS:  Those who oppose the bill say that the surcharges
allow companies to increase their rates without a full financial
review and may lead to overcharging consumers.  It is best to
have general rate cases every three years to monitor the
situation.

Testifying against the bill were Office of Public Counsel;
AARP-Missouri; Consumers Council of Missouri; and Office of the
Attorney General.

OTHERS:  Others testifying on the bill say that utilities have
not been able to provide actual figures for bad debt and that
rough estimates may not be sufficient to implement the
legislation.

Testifying on the bill was Missouri Public Service Commission.

Missouri House of Representatives
94th General Assembly, 2nd Regular Session
Last Updated October 15, 2008 at 3:12 pm