JEFFERSON CITY | Legislation allowing utilities to charge ratepayers for power not yet being produced is headed to the Senate Floor after passing a committee today.
The bill would repeal a prohibition on “construction work in progress,” or CWIP for short, so that companies could charge consumers for a power plant’s construction costs before it begins generating power.
The bill is being pushed by AmerenUE, a large electric utility serving eastern Missouri, including St. Louis. The Senate Commerce, Consumer Protection, Energy and Environment committee voted 6 to 4 on to pass the bill on for debate before the full Senate.
Ameren claims the law must be changed to enable construction of a nuclear power plant in central Missouri known as Callaway 2. The plant is needed to meet the state’s future energy demands, the company contends, but cannot be financed unless customers begin paying costs ahead of and during construction.
“We commend the committee members for recognizing that this legislation offers financing mechanisms that are critical to the development of generation, while offering strong consumer protections and significant regulatory oversight,” company spokeswoman Susan Gallagher said in the statement.
Although Ameren is pushing hardest for the bill’s passage, it could have effects far beyond its service area. Other utilities could make use of CWIP for their own new power plants if the law is changed.
Ameren also has said it intends to sell nearly half of Callaway 2’s power generation to other utilities, possibly including some in the Kansas City area.
But the legislation has drawn fire from consumer groups and large industrial users and is looked on warily by some members of the Public Service Commission, the state agency that regulates utilities and sets rates.
Opponents argue that the bill unfairly transfers the financial risk of building a plant to ratepayers while shifting wealth to Ameren and goes too far in stripping the commission’s regulatory powers.
The version of the bill that passed today attempted to blunt those concerns by strengthening consumer protections, increasing Public Service Commission oversight and setting benchmarks that a utility would have to meet before passing costs on to the consumer.
Yet most of the critics — including consumer groups and industrial customers such as Anheuser-Busch, Noranda Aluminum Inc. and Ford Motor Co. — said the changes didn’t go far enough.
“The bill is atrocious,” said Charles Skoda, a vice president for Noranda. “I am surprised that anybody in today’s environment would want to raise rates and threaten some of the state’s largest employers.”
Sen. Kurt Schaefer, the Columbia Republican who oversaw the drafting of the new language, acknowledged that the bill was far from perfect, and that much debate remained for lawmakers on the Senate floor.
“I don’t want anyone to think this is the end-all be-all,” Schaefer said. “I think it still has some issues, but I think it meets the baseline minimum, at least from my perspective, to get it through this committee and onto the Senate Floor.”