Ratepayer Bill of Rights
FERAF’s 2011 Ratepayer Bill of Rights focuses on pro-consumer initiatives in three broad areas:
1. Improving the rate-making process
2. Strengthening the consumers’ role in that rate-making process
3. Preventing utilities from levying automatic rate increases on Missourians through surcharges
Improving the Ratemaking Process
The current rate-making process has ensured that Missouri has some of the lowest utility rates in the Midwest. FERAF is committed to strengthening that process by ensuring that ratepayers do not pay the high costs generated when utility companies seek rate increases, strengthening the voice of consumer advocates, and opposing utility company attempts shorten the amount of time allowed to consider rate increase requests, thereby allowing utility companies to raise rates more frequently.
Did you know that right now you pay the cost for the very lawyers and consultants who go before government regulators seeking to raise your utility rates? That’s right, utility companies spend millions every year in an effort to raise your rates, and you pay the tab. And because you are paying the tab, the utilities have no incentive to keep those costs low. FERAF believes utility company shareholders should bear the cost of efforts to raise rates, not the consumers who have to pay those higher rates. FERAF supports legislation that would impose the cost of seeking rate increases on the shareholders who benefit from them, not the consumers who have to pay them.
2.Utilities should be required to share rate increase information when filing a rate increase request.[+]
Utility companies often point to cost increases when requesting a rate increase. To have an effective voice in the rate process, consumers must have access to data regarding the cost increases utilities claim are causing the need for rate hikes. Without this data, regulators and consumers are in the dark about whether the increase is actually needed.
Missouri statutes should strengthen the rate process by requiring utilities to be more transparent. Utilities should be statutorily required to provide consumers and regulators a full package of data supporting any rate increase request, including workpapers, schedules and financial models. If they fail to provide this information at the time of the rate increase filing, they should be required to go back to the drawing board, withdraw their rate case and file a new case and restart the clock. Moreover, utilities should be penalized if they fail to respond to reasonable information requests. FERAF supports legislation requiring utilities to provide regulators and consumers full transparency at the time a rate increase request is filed.
The utility companies will be back in the next legislative session with a proposal to allow them to raise utility rates more frequently. They support legislation to shorten the rate case period, which reduces the amount of time that consumer advocates have to present evidence against a rate increase, makes it more difficult for the PSC to review all relevant factors, and in effect, allows utility companies to raise rates more easily and more frequently. FERAF opposes proposals to shorten the rate case process.
Strengthening Consumers’ Voices in the Ratemaking Process
The Office of the Public Counsel (OPC) serves as the only official voice of consumers in utility rate issues. The OPC represents consumers in rate case proceedings before the Public Service Commission (PSC). FERAF believes that strengthening the OPC strengthens the power of consumers and helps keep utility rates fair and affordable.
The PSC Staff and the OPC have had their resources slashed making it impossible to effectively audit the ever-increasing number of utility rate requests. Missouri statutes must be strengthened to ensure the PSC regulatory staff and the OPC have adequate resources to scrutinize utility rate hike filings. Efforts to block the utility watchdogs through budget cuts must be reversed so utility rate cases can be effectively scrutinized and challenged.
Transparency of utility rates requires that Missouri statutes provide fool-proof mechanisms to ensure the OPC and PSC Staff are fully funded and have adequate employees to deal with the constant barrage of Missouri utility rate increase filings. FERAF supports increased funding for the OPC and PSC staffs.
One way to ensure that Missouri’s utility consumers have a strong voice is to ensure that the OPC has the resources and staff it needs to properly represent the interests of consumers. In these tough budget times, too often utility company lobbyists are successful in weakening consumer power by convincing the Missouri legislature to cut funding for the OPC.
FERAF believes that the OPC should be funded the same way the PSC is funded – through utility rates. Assessment funding guarantees a steady revenue source for the OPC outside of the politically charged budget process. Additionally, only those consumers who benefit from the actions of the OPC pay the assessment. FERAF supports strengthening the OPC by passing legislation creating an assessment funding mechanism for the OPC.
6.The OPC should have the ability to seek refunds for Missouri consumers when a court finds utility rates to be unfair.[+]
Currently, when the OPC appeals a PSC rate decision and requests a court to overturn a rate case decision, the OPC must post a bond in order to seek a refund of funds the utility has already collected from consumers. However, the OPC currently doesn’t have the ability or revenue to post a bond. In effect, the OPC cannot seek refunds for consumers even when rate decisions are overturned by the court. FERAF supports eliminating the bond requirement in order to allow the OPC to seek refunds for Missouri consumers when a court finds an increased rate is unlawful.
Preventing Automatic Rate Increases through Surcharges
FERAF is fighting to repeal unfair surcharges on your electric bill. A surcharge is a way for Missouri’s public utilities to automatically increase utility rates on Missouri consumers outside of the normal ratemaking process. Surcharges are a form of single issue ratemaking. FERAF opposes single-issue ratemaking, which leads to automatic rate increases for exactly these reasons. Surcharges reduce the incentive for utility companies to reduce costs and operate efficiently.
7.Utility companies should not be allowed to pass on the cost of complying with environmental regulations to consumers without going through the rate case process.[+]
The ECRM allows utility companies to pass on costs of complying with environmental regulations directly to consumers, outside of the normal rate case process. No one knows how much this could raise consumer rates. FERAF believes that the costs of complying with environmental regulations should be considered along with all others as part of the rate case process, and not as a surcharge. FERAF supports repealing the Environmental Cost Recovery Mechanism.
8.Utility companies should not be allowed to forgo the normal rate-making process to charge consumers for increased fuel charges.[+]
As fuel charges have increased on Ameren, as on all of us, Ameren has raised electrical rates via a fuel adjustment surcharge. Often, Ameren has imposed these fuel surcharges even when their revenues are increasing. The result is that, while all Missourians struggle with increased fuel charges, only Ameren is able to pass those increased costs on to hard working families. Increased fuel costs should be considered by the PSC as part of a comprehensive review of a utility’s finances, not as a stand-alone cost. FERAF supports repealing the Fuel Adjustment Clause.
9.Utility companies should not be allowed to pass on infrastructure costs to consumers without going through the rate case process.[+]
Electricity companies are seeking a new surcharge that would allow them to pass along the cost of new infrastructure investments – such as poles and lines – directly to consumers. FERAF believes these costs should be considered as part of the normal rate-making process. FERAF strongly opposes the creation of an Infrastructure System Replacement surcharge.
The utility companies are actually seeking a surcharge to allow them to offset lost revenue that results when consumers use less energy. In other words, they charge you more when you use less. FERAF believes that when you use less energy, your utility bill should reflect that. FERAF opposes the “Save More, Pay More” surcharge.
Gas companies will probably be back again trying to create a surcharge that would allow them to charge you immediately when other people don’t pay their utility bills. Even worse, they wouldn’t even have to justify these rate increases to the Public Service Commission before they go into effect. If this new practice were to become law, what motivation would the gas companies have to track down customers skipping out on their bills when they could just shift that debt to other customers? FERAF opposes the Bad Debt Surcharge.
Dear Scotts,Can you believe it? In 2012, Ameren Missouri profited around $70 million more from electric customers than regulators authorized. On top of that, Ameren’s CEO received $6.2 million in compensation in 2012, a 9% increase from 2011. This was the same year that Ameren raised your rates AGAIN, up 43% since 2007 costing customers a total of $2.8 billion by the end of the year.In 2012, the Missouri Public Service Commission authorized Ameren to collect a generous 10.2% profit margin but financial data shows that the company actually received around an 11.48% profit from Missouri customers for the year. In addition, Ameren Corp.’s chairman, president and CEO received a 9% increase in total compensation in 2012, totaling $6.2 million.Ameren continues to raise rates and attempts to add surcharges to your bill, all the while making more profits off of your money than ever and paying their executives more than ever. Ameren is currently pushing legislation in Missouri that would allow it and other investor-owned utilities to add a new and expensive surcharge on Missourians’ electric bills. Learn more about this bill and urge your legislator to vote no on this egregious overreach.Sincerely,The FERAF Team
Fair Energy Rate Action Fund • PO Box 1153 • Jefferson City, MO 65102
Paid for by the Fair Energy Rate Action Fund.
<a href=”http://www.fairelectricityrates.org/petition“><img src=”http://www.fairelectricityrates.org/wp-content/uploads/2010/03/banner3.jpg” alt=”Fair Electricity Rate Action Fund”></a>