Pleus on SB 240 Veto

Larry Pleus, Laclede Gas’ director of government relations, expressed disappointment at the governor’s veto of the “gas ISRS bill,” SB 240:


First, let me express our appreciation to our supporters and opponents alike who were willing to engage and work to understand the merits of SB 240 Gas ISRS/Bad Debt – a piece of legislation that would have promoted public safety, created jobs and had a minimal if not positive impact on customer rates.   It has become all too common for any legislation that modifies the way utilities are regulated in Missouri to automatically attract opposition from the ever-burgeoning cottage industry of opposing lobbyists.  In fact, that opposition occurs regardless of whether the legislation has any meaningful impact, let alone an adverse impact, on consumers.  That statement is not a presumption, it’s a fact.


Second, while the Governor’s veto of SB 240 was disappointing, the veto message and press release that accompanied it was even more disturbing given its inaccurate and exaggerated characterization of what the legislation would do.  Among other things, the veto message inaccurately stated that the gas ISRS legislation was passed 10 years ago because Laclede and MGE were “behind” on their safety upgrades.   That is completely false.  


The veto message also said that the gas ISRS only applies to Laclede and MGE.  Again, this is completely inaccurate as there are three other gas utilities that have or could use the ISRS mechanism.


His response also implied that SB 240 would increase gas rates by 30% based on raising the cap from 10% to 13%, completely ignoring that coupling the cap extension with extending the rate case requirement from 3 to 5 years actually lowers the annual cap…Simple math.


Moreover because the 13% cap relates to only one part of the utility’s cost structure, it is actually a much lower cap as a percentage of the customer’s entire bill.  In fact, ISRS charges as a percentage of the customers overall bill have averaged around 1% per year, and nothing in SB 240 would have changed this.


Finally, while the uncollectible provision would have applied to both decreases and increases in this cost of business and would have ensured that customers were not overcharged for this expense, we agreed to forego the provision if desired by the Governor in our acquisition agreement with MGE   That would have required NO future legislative action.


Again, the veto message made no mention of these facts.  For whatever reason instead of engaging on discussion on whether to include or exclude this provision, the Governor chose to make it an issue in his veto message.


In short, the SB 240 was a sensible, moderate and fair mechanism for reducing the frequency of expensive rate cases, while allowing utilities to continue to upgrade their systems while enhancing safety and creating jobs.   Large bi-partisan majorities of the Senate and House understood that and the Governor’s inaccurate veto message did a disservice to them as well as to local utilities who have been investing in this state and providing safe and reliable service to their customers for more than a century and a half.


Originally in July 22 MOScout.