SS SCS HB 208 -- UTILITIES

This bill changes numerous laws on utilities.

CONSUMER-OWNED ELECTRIC COOPERATIVES

The bill prohibits the Public Service Commission from regulating
the rates, financing, and management of consumer-owned electric
corporations that are required to operate on a not-for-profit
cooperative basis and, as of August 28, 2003, hold a certificate
of public convenience and necessity to serve a majority of their
consumer-owners in third classification counties.

ELECTRICITY FOR SMELTING FACILITIES

The bill allows certain aluminum smelting facilities to purchase
electrical power on the open market without regulation by the
Public Service Commission.  To be eligible, the facility must be
in a county of the second classification, must have used more
than three million megawatt hours of electricity in a calendar
year, and must have been served by a municipally owned utility
and an electric generating cooperative owned by rural electric
cooperatives.  The initial unregulated contract must not have a
negative financial impact on previous power suppliers or their
customers, reduce service reliability to other customers, or
reduce local or state tax revenue.  The smelting facility cannot
resell the power to anyone except the original suppliers.  Local
or past suppliers of electrical power will no longer have any
obligation to provide service to the facility.  The bill also
allows municipalities to purchase electricity and ancillary
services from any supplier without regulation beyond the approval
of the governing board of the municipality.

This portion of the bill contains an emergency clause.

PUBLIC SERVICE COMMISSION

The bill requires the Public Service Commission to retain a
technical advisory staff of up to six members with expertise in
accounting, economics, finance, engineering or utility
operations, law, and public policy.  Each commissioner may also
retain a personal advisor.  All hiring of technical advisory
staff members must be completed by July 1, 2005, and be offset
through elimination of other commission staff positions.
Advisory staff members cannot be a party to any case before the
commission and are subject to the same ex parte and conflict of
interest requirements as commissioners.  No one regulated by,
appearing before, or employed by the commission may offer
advisory staff members new appointments or positions, and new
advisory staff members cannot have been employed by the
commission, the Office of the Public Counsel, or any company
regulated by the commission for at least two years before being
hired.

Commissioners may confer with others on matters not relating to
filed cases.  Commissioners may also confer with others on
matters relating to pending or filed cases if no evidentiary
hearing has been scheduled and if the matter is discussed at an
announced public meeting or a forum where affected parties are
present or if the discussion is subsequently disclosed to
affected parties.  If an evidentiary hearing has been scheduled,
commissioners may only discuss matters relating to procedures or
unanimous agreements that resolve a case fully.

COST RECOVERY FOR INFRASTRUCTURE SYSTEM REPLACEMENT PROJECTS

The bill allows water corporations serving more than 10,000
customers in St. Louis County and all gas corporations to file
petitions with the Public Service Commission for rate adjustments
that recover from customers prudently incurred costs for
infrastructure replacement projects.  Eligible projects may
include replacement of deteriorating equipment, safety
enhancements, and non-reimbursed costs of facility relocations
required by highway and other public works construction.
Projects may not increase revenue by connecting to new customers
and must not have been included in the corporation's last general
rate case.  Commission staff may examine the petition and submit
a report within 60 days.  The commission may hold a public
hearing and must issue an order that becomes effective within 120
days after the petition is filed.  During its consideration of
the petition, the commission may not examine the corporation's
other revenue requirements or rate-making issues.

Adjustment charges must appear on customers' bills as a separate
charge and may only apply to classes of customers that receive
benefits from the infrastructure replacement project.  Charges
must be applied in a manner consistent with the customer class
cost-of-service study from the corporation's most recent general
rate proceeding.  Charges will not be approved if the
corporation's last general rate proceeding was more than three
years before the petition was filed or if the adjustment produces
revenue exceeding 10% of the base revenue level approved in the
corporation's last general rate proceeding.  Rates may not be
adjusted more than twice a year, and charges may not be collected
for more than three years unless the corporation has filed or is
the subject of a new general rate proceeding.  Estimated monthly
charges are subject to annual reconciliation.

SERVICES BY UTILITIES

Under current law, electric, gas, and heating utilities are
prohibited from offering heating, ventilating, and air
conditioning (HVAC) services unless the company was providing
these services for the five years prior to August 28, 1998.  The
bill clarifies that the exemption only applies to areas being
served on a regular basis before August 28, 1993.  The bill also
requires utilities to comply with the same state and local
requirements as other HVAC contractors and authorizes the
Attorney General to enforce pertinent statutes.

OTHER PROVISIONS

The bill also:

(1)  Requires the Public Service Commission to treat pipeline
capacity costs for schools that make aggregate purchases of
natural gas in the same manner as costs for large industrial and
commercial customers;

(2)  Allows telecommunications companies to offer discounted
rates, special promotions, and term agreements of up to five
years on any of their services; and

(3)  Allows steam heating companies with fewer than 100 Missouri
customers to file under the small company rate procedure by
giving notice to the commission, the Public Counsel, each
customer, and each gas and electric corporation providing utility
service in the area.  Customers and corporations that respond
within 30 days may participate in any case hearings or
conferences.

Missouri House of Representatives
Last Updated July 25, 2003 at 10:11 am