A rendering shows Evergy’s planned natural gas plant in Hutchinson, Kansas. The electric utility plans to add two combined-cycle natural gas plants in Kansas by the end of 2030 (photo courtesy of Evergy).
Missouri’s two largest electric utilities want the state’s permission to charge customers for natural gas power plants before they’re completed.
Both Evergy and Ameren Missouri asked the Missouri House Utilities Committee on Wednesday to support legislation that would allow them to charge customers for natural, or methane, gas power plants even before they’re completed, saying the state needs more electrical power.
Because Ameren, Evergy and other Missouri electric companies are monopolies, the rates they charge customers must be approved by state regulators. Right now, they’re only permitted to charge customers for the cost to build power plants once they’re completed.
The utility companies — along with business groups and economic development officials — say Missouri is losing out on attracting major employers to the state because it doesn’t have enough power supply.
“With the strain on our grid, the first question business locators are asking local economic developers is not what your workforce looks like or what the tax structure is,” said the bill’s sponsor, Republican state Rep. Josh Hurlbert of Smithville. “It’s, ‘Do you have the power necessary for our project?’”
Hurlbert claims his district missed out on a major economic development project because of power supply issues, though he didn’t offer any specifics at Wednesday’s hearing.
But environmental and consumer advocates say the legislation, known as “construction work in progress,” just allows more profit for monopoly companies at the expense of consumers.
Missourians speak out against proposed Ameren electric rate increase in public hearing
“They like construction work in progress because they’re having us make the investment for them,” said John Coffman, an attorney for the Consumers Council of Missouri. “They’re actually collecting profits, return on equity, during the construction of the project before they’ve even proved that they can do it.”
Proponents of the legislation pointed to Kansas, which passed construction work in progress legislation last year, as a success story. Evergy last year announced it would build two new natural gas plants in southwest Kansas.
“Kansas saw this as a jobs bill,” said Jason Clint, senior director of external affairs for Evergy. “They understood that if we don’t have the power, then we are not going to attract anyone to our state that brings the jobs.”
Supporters also included the chair of the Missouri Public Service Commission, Kayla Hahn. The commission regulates utility providers and must approve rates before companies, including Evergy and Ameren, can change customers’ prices.
“We don’t want to be losing any football teams, Googles, Metas or gas plants to Kansas,” Hahn said.
Hahn’s support of the bill despite being a utility regulator drew criticism later in the hearing from Jeanette Mott Oxford, a former Missouri House member. She said since she started coming to the Missouri Capitol more than 30 years ago, she had not heard the Public Service Commission testify in favor of legislation.
She said she testified in opposition to a proposed rate hike by Ameren Missouri and staff of the commission were not allowed in the room.
“Has something changed that the Public Service Commission is now being an advocate for power companies?” Mott Oxford said.
The bill is one of several pieces of utility legislation heard this week that drew criticism from consumer advocates.
On Wednesday, the Senate Commerce Committee heard legislation that would allow utilities to defer and collect a return on certain costs associated with building natural gas power plants. The state has such a provision now, but it excludes natural gas.
The legislation would also require that, before taking a power plant offline, a utility places an equal or greater amount of power generation on the grid.
James Owen, executive director of Renew Missouri, said the legislation creates a misperception that clean energy sources, such as wind and solar, are not reliable. The bill requires utilities place “reliable and dispatchable” power on the grid when taking a generator offline but does not define what lawmakers consider reliable and dispatchable.
“Our concern,” Owen said, “is when we hear proponents of this legislation talk about clean energy in a way that suggests it would not fit in with those definitions.”