Missouri House passes proposal for lower electric rates
Measure to include all facilities that use more than 50 megawatts of electricity a month.
JEFFERSON CITY, Mo. — The Missouri House has advanced a bill that would allow manufacturing companies to negotiate lower electricity rates than currently allowed, a measure supporters say could bring hundreds of jobs to the southeastern corner of the state but critics argue would raise rates for utilities customers.
The bill is meant to entice a steel company to come to New Madrid where the closure of a Noranda aluminum smelter last year caused more than 900 people to lose their jobs. A Switzerland-based company has since purchased the plant and expressed interest in reopening part of it.
The two new companies could create up to 500 jobs combined. But they won’t operate in Missouri unless they have the ability to negotiate a special rate, said Rep. Don Rone, who sponsored the bill.
The original legislation would’ve only allowed aluminum smelters and steel-works facilities to negotiate the lower rate for a longer contract. But lawmakers expanded the measure during a floor debate to include all facilities that use more than 50 megawatts of electricity a month – that’s nearly five times the amount that the average US residential customer used all year in 2015, according to the US Energy Information Administration.
Rone said in a committee hearing that a proposed steel mill would use 50 to 60 megawatts of electricity a month, and the aluminum smelter would use 180-190 megawatts.
Electricity for the steel mill and aluminum smelter would likely be delivered by the state’s largest electricity provider, Ameren Missouri. But Critics of the proposal said that the lower electricity rates for large manufacturers could cause increased monthly costs for households and smaller businesses across the state.
“We’re going to raise monthly utilities rates for Ameren customers to pay for something that benefits one part of the state,” said Rep. Tracy McCreery, a Democrat from Olivette.
Republican lawmakers stood and applauded for Rone after the bill passed the House with a 120-17 vote. Rone, a Republican from New Madrid, told reporters that the bill’s passage would give hope to a region that has suffered economically since the smelter closed last year.
“(This is) a relief to the people I serve,” he said. “ … We’ve got a chance to go back to what we had when Noranda was there.”
The proposal now moves to the Senate, where similar language stalled before the May 12 regular session deadline. Some lawmakers were concerned about a provision that critics said would allow investor-owned utility companies to more easily increase rates and receive compensation for projects like electrical grid improvements.
That amendment was removed during a committee hearing to ease opposition, but House Speaker Todd Richardson said that a discussion about ratemaking mechanisms would likely resurface in the future.
“I think the state of Missouri needs to have a longer-term conversation about energy policy and what that needs to look like,” Richardson said. “The status quo for energy policy right now isn’t working particularly well.”