(Robert Zullo/States Newsroom)
“How much profit is enough?”
It was a question posed by an upset electric customer venting at a recent Public Service Commission hearing for an Ameren electricity rate hike. “At the expense of poor people and the elderly that are on fixed incomes,” he continued.
The collective frustration made it clear customers are feeling the financial pinch of a monopoly utility system.
The answer to the question above is that there will never be enough profit simply because in a monopoly system, the utility gets paid the more they build. It’s a strategy that benefits shareholders, not customers.
What Missourians are experiencing is skyrocketing electricity bills because of the power generation inadequacies and failures of the electric utility monopolies.
Customers are trapped.
It’s a story that has played out in other states where privileged utilities are in a position to take advantage of customers. I experienced this first-hand as the Public Utility Commissioner for Pennsylvania in the mid-1990s, when we were looking for a solution to end rolling blackouts and astronomical rate hikes forced onto consumers because the only option we had was the reliance on local utilities to generate and supply electricity.
Fortunately, we identified a commonsense solution: make electricity generators and suppliers compete for the business of energy users.
In 1996, Pennsylvania introduced a competitive electricity market, ending blackouts and producing an electricity service that has become more reliable than ever. With competitive generation companies investing in Pennsylvania, competing for the business of families and commercial energy users, more than 15 gigawatts of new generation has been built and paid for by those companies –– not by captured utility ratepayers.
Pennsylvania has built so much electricity generation that it leads the country in exporting electricity to other states. While Pennsylvania exports power, Missouri’s electric utilities do not generate enough power to supply Missouri, forcing them to purchase out-of-state electricity to keep the lights on in times of high demand. That has led to Missouri utilities adding “fuel adjustments” to ratepayer bills in between rate cases for over a decade due to their “unforeseen fuel costs.”
Competitive electricity prices in Pennsylvania today for residential customers are about 19% to 51% lower than where they were before the 1996 transition to competition. Some consumers are paying less for electricity generation in 2025 than they were paying in 1996, even without adjusting prices for inflation.
Competition and energy choices save consumers money over time. They also give customers access to different and innovative electricity products and plans for customers to choose from. It’s having electricity your way.
But how can Missourians have it the competitive way?
Bill loosening rules for Missouri electric rates speeding toward passage
State Rep. Don Mayhew and state Sen. Nick Schroer have introduced legislation (House Bill 417 and Senate Bill 487) to give Missourians a modern approach to affordable and reliable electricity. They recognize that it is high time for customers to have the power to choose their electricity providers, fostering an environment where innovation and efficiency can thrive.
While these two bills promote consumer choice and market competition, it’s just one part of the puzzle. Equally important is opposition to measures that undermine these principles. One such measure is Senate Bill 4, the Construction Work In Progress (CWIP) legislation that has passed the Senate and is moving quickly through the House.
This legislation will allow utility companies to charge customers for the cost of building new generation plants before they are operational. This practice places an undue financial burden on consumers and removes any risk from a utility company, which is guaranteed payment regardless of the project’s success, efficiency or if it even ever starts producing electricity.
Missouri should learn from other states like South Carolina where electricity monopolies used their political power to enact CWIP. The result was a $9 billion boondoggle! Consumers paid billions to build a generation plant that was never completed and never generated any electricity.
With a CWIP system, consumers bear the financial risk while utility companies reap the rewards.
This is one more reason why competition is needed more than ever.
Missouri leaders need to be thinking about how to protect their constituents, not the pockets of the utilities and their shareholders who continue to prove to be costly and unreliable.
It’s time to recognize the shortfalls of the current monopoly utility system and learn from the successes of competitive energy states that can show Missouri how to bring new innovations to serving electric customers.