Why is the Missouri Legislature Raising My Electricity Rates?
Missourians’ electricity rates will increase if the state Senate passes Senate Bill 805, which drives costs higher for expensive construction of transmission lines, passing those increases on to customers.
Missouri’s incumbent utilities want to be awarded these construction contracts without going through a fair bidding process, strengthening their grip over electricity in the state while increasing their profits.
A Bad Time to Raise Electricity Rates
The costly proposal comes at a time when electric rates are already increasing.
Ameren raised rates by $140 million in 2023 after requesting a $316 million increase.
In 2022 Liberty incresased their rates by more than $35 million after requesting an approximate $80 million increase.
In February of this year, Evergy requested a $104 million rate increase in Missouri following an increase of $20-$30 million effective January 9, 2023.
Missourians are Losing their Jobs Because of High Electricity Rates
400 workers in the Bootheel lost their jobs with the closure of the Magnitude 7 Metals plant there. The plant closed because of high energy costs.
“The Magnitude 7 plant closure reveals one of the major challenges facing the [aluminum] industry: electricity costs…local officials said that high energy costs no doubt contributed to the plant’s difficulty.”
Source: E&E News
Senate Bill 805 Adds Even More to Electricity Costs
Under Senate Bill 805 by Sen. Rusty Black, there would be no competitive bidding for transmission projects.
The anti-competition proposal, known as “Right of First Refusal” (ROFR) eliminates competition from multi-million contracts for building new high-powered transmission lines.
Competition in power line construction saves consumers 20-30% on their electric bills.
Minnesota enacted a ROFR bill, and construction costs of new power line there doubled to $1.14 billion.
The Trump Administration Opposed “Right of First Refusal” (ROFR) Proposals as Bad for the American Economy
The Trump Administration Department of Justice took a strong stance against ROFR, writing:
“Competition is a core organizing principle of the American economy, and vigorous competition among sellers in an open marketplace gives consumers the benefits of lower prices, higher quality goods and services, increased access to goods and services, and greater innovation.”
Missouri Voters Support Competition
Missouri voters support competition for power line construction because it leads to lower costs for everyone. Consumers suffer when legislators give special rights to favored utilities.
Anti-competitive proposals favoring utility companies fly in the face of the principles that made America great, like competition, free markets and freedom.