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Dec. 19, 2023 |  By: Allison Kite - Missouri Independent

Missouri legislative leader files bill targeting time-of-use utility pricing plans

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By Allison Kite - Missouri Independent'

One of Missouri’s highest-ranking lawmakers hopes to stop state regulators from forcing electric utilities to charge a premium for power used at times of high demand.

The legislation filed by Senate Majority Leader Cindy O’Laughlin was inspired by Evergy’s roll out of time-of-use pricing plans to its customers last summer, which included a plan that would have quadrupled customers’ charges for energy used at times of high demand. 

The new rates were mandated by the Public Service Commission, a five-member board appointed by the governor and confirmed by the Senate that oversees investor-owned utilities in Missouri.

The goal of time-of-use rates is to save consumers money in the long run by limiting demand on the energy grid. But they immediately inspired public backlash, including from O’Laughlin, R-Shelbina. 

“It’s not the job of the Public Service Commission to dictate to consumers the time of day that they can use power,” O’Laughlin said in an interview last week. 

O’Laughlin said she expects energy regulation to be a  “hot topic” when the Missouri General Assembly returns to Jefferson City. In addition to her time-of-use legislation, she’s also sponsoring a bill she says would ensure grid reliability by requiring utilities to add at least an equivalent amount of energy generation to the grid before decommissioning a power plant. 

Environmental advocates, however, fear that proposal would hamper utilities’ efforts to transition from fossil fuels to clean energy. 

Evergy, which is the largest energy provider in Western Missouri, began informing customers in June that power used between 4 p.m. and 8 p.m. during the summer would cost four times as much as it does during other months.

That means, on a hot summer afternoon, running an air conditioner would become far more expensive. 

Other pricing options, imposed by the Public Service Commission, were less dramatic. But that pricing plan caught O’Laughlin’s attention. She railed against what she referred to as “woke” energy policies.

Time-of-use pricing is meant to encourage customers to limit their energy consumption at times when energy demand is high. By limiting the peaks of demand, the idea is to save utilities from having to build more power generators, which customers end up paying for. 

Citing the pushback, Evergy asked the Public Service Commission in September to allow it to make time-of-use pricing optional, citing the “substantial” number of complaints it received where customers accused the company of trying to “spike customer bills to increase profits.” 

The Office of the Public Counsel, which represents ratepayers before the Public Service Commission, argued that the rates should still go into effect, citing Evegy’s studies that show customers will largely benefit. 

Clean energy advocates with Renew Missouri put it more starkly, saying Evergy needed to better communicate with its customers “rather than succumbing to negative Facebook comments by reversing course and attempting to upend a binding commission order.” 

O’Laughlin isn’t trying to ban time-of-use pricing, but rather simply require it to be optional for customers.

Evergy withdrew the request to make time-of-use pricing optional but did succeed in making the default pricing plan one more similar to the previous flat-rate pricing rather than the plan that quadruples rates on summer afternoons.

Because of that, O’Laughlin said, the issue isn’t as urgent as it appeared this summer. But she still wants to send the Public Service Commission a message. 

“If they made a decision like that once,” she said, “the likelihood that they might try to do that again I would say is fairly high.”

Evergy’s spokeswoman said the company hadn’t seen the bill and could not comment on it. 

Grid reliability 

O’Laughlin is also sponsoring a grid reliability bill she says is a response to the federal government’s efforts to force “death by a thousand cuts” on coal plants. 

“I cannot imagine that we want to allow our citizens and our businesses to run out of power basically because of political activism,” she said.

The legislation, she said, is inspired by the impending closure of the Rush Island Energy Center, owned by Ameren Missouri, which serves electric customers in the greater St. Louis area.

Ameren was ordered by a federal court to install pollution controls at Rush Island after being found in violation of the Clean Air Act. Instead, the utility plans to shut the coal plant down.

Last month, Ameren asked the Public Service Commission for permission to use a new financing law known as securitization to recoup its investment at Rush Island and shutter the plant. 

Ameren and other utilities belong to regional grid operators. In Ameren’s case, the Midcontinent Independent System Operator that coordinates power production to ensure there’s enough electricity to support the grid. Those organizations impose complicated capacity requirements on utilities, and MISO has raised concerns about the planned closure of Rush Island.

Ameren Missouri’s vice president of regulatory and legislative affairs, Warren Wood, said in a statement that the company would monitor O’Laughlin’s bill as it moves through the legislative process. 

 “Delivering safe, reliable and affordable energy to our customers and the communities we serve is our top priority,” Wood said. “We aim to do that by having a diversified generation portfolio that supports the overall reliability and resiliency of the energy grid.”

State Sen. Tracy McCreery, D-Olivette, said a lot of the state’s residents want environmental responsibility, but it’s important to ensure that when Missourians “turn on the switch, they have reliable, safe energy.”

“I’m certainly wanting to make sure that I’m doing things that leave the state of Missouri in a better place than I found it,” she said, “but we’ve got to be responsible about that.” 

Jenn DeRose, Sierra Club’s Beyond Coal Campaign representative for Missouri, said the idea behind O’Laughlin’s bill makes sense at first glance, but ensuring reliability is MISO’s job. 

She’s not sure the state has the ability to wade into that complicated calculation.

“This bill is trying to fix a problem that doesn’t exist,” DeRose said. “It’s just fear mongering.”