Dive Brief:
- The Missouri Senate last week passed a bill to overhaul how utility rate cases are handled, simplifying the lengthy process by allowing smaller, more predictable rate increases each year.
- The bill would limit Ameren and Kansas City Power & Light to annual rate increases of no more than 2.85% for a period of five years.
- Senate Bill 564 would also require utilities to invest in utility-owned solar facilities. The largest utilities, like Ameren, must invest $14 million in Missouri or in an adjacent state, with smaller ones are directed to shell out $4 million.
Dive Insight:
This isn't the first time Missouri lawmakers have floated an overhaul of how utility rates are set. A similar proposal in 2016 would have allowed annual rate increases up to 3.5%.
The latest iteration pushed for 3%, but critics say it will raise costs for customers. Proponents say those costs will rise anyway, and smaller and predictable rate increases are better for customers overall. After a grueling 20-hour work session and a filibuster, the rate increases were further limited to 2.85% annually, for five years.
The bill does more than overhaul the rate setting process, however, by directing utilities to offer solar rebates and invest in utility-owned solar projects. Utilities with more than 1 million customers will need to spend $14 million on solar; utilities with 200,000 up to a million customers will need to invest $4 million.
Beginning next year, the law requires utilities to make solar rebates available for new or expanded electric systems up to 25 kW for residential customers, and up to 150 kW for nonresidential customers. Rebates for the largest utilities are capped at $5.6 million or $28 million over five years.
