By Johnny Kampis | Missouri Watchdog
ST. LOUIS — The Missouri Public Service Commission can’t guarantee that establishing a lower utility rate class for older and low-income residents won’t increase rates for others.
The PSC last week ordered an inquiry into the effects of a 15 percent rate hike on poorer residents and established a docket to consider methods used in other states to reduce the impact of higher bills on people with lower incomes.
Ameren Missouri asked for the rate hike.
Representatives from Ameren and the PSC are crisscrossing the state for a series of public hearings on the company’s request to increase power revenue by $376 million. The average monthly residential customer’s bill would increase about $14 based on usage of 1,100 kilowatt-hours, according to the plan.
PSC Commissioner Robert Kenney told Missouri Watchdog there’s a chance the establishment of a lower rate class would lead to higher bills for others. That would be on top of Ameren’s new rate hike, if approved.
“There’s always the possibility for a cross subsidization, but we try to minimize those,” Kenney said. “We want to look at how we can
help lower the rate for low-income customers without burdening those with higher income rates.”
The Office of Public Counsel, the AARP and other utility and advocacy groups are expected to file briefs giving input on how rate classes and other programs could help poorer residents deal with rising utility costs. Comments are due by Sept. 7; reply comments by Sept. 24.
Kenney cites California as a model. Utilities there offer 20 percent discounts for households making less than 200 percent of the federal poverty level, which is $46,100 for a family of four.
A reduction in the number of delinquent bills might mitigate the ensuring effects for all customers. Kenney said the cost of collecting past-due bills or disconnecting and reconnecting customers is significant, and those expenses are passed from the utilities to all customers.
“Potentially, this could offset the costs of the utilities’ bad debt expenses,” he said.
The PSC approved a 7 percent increase for Ameren last year, which was expected to boost revenue by $172 million.
The public hearings will conclude with a session in Kirksville on Aug. 23. Formal evidentiary hearings are scheduled in the PSC’s Jefferson City offices Sept. 24-Oct. 12. A decision on the rate hike is expected by the end of the year.
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