Dive Brief:

• Utilities in Missouri are backing a legislative proposal to overhaul rate regulation, a move they say would give more predictability to increases and allow them to modernize the grid faster, the St. Louis Post-Dispatch reports. 
• The bill is being supported by Ameren, and has been sponsored by Sen. Ryan Silvey (R) and Senate President Pro Tem Ron Richard (R).
• The idea has support from Noranda Aluminum, an ailing smelter which says lower rates it would negotiate with Ameren could allow it to remain in business. But critics say the changes would essentially gut the Public Service Commission's authority.

Dive Insight:

No one argues that the year it can take to navigate a new rate case shouldn't be shortened. But critics of a new proposal say it takes almost all authority out of the hands of regulators.

“You’re just basically gutting the PSC,” Diana Vuylsteke, counsel for Missouri Industrial Energy Consumers, told the St. Louis Post-Dispatch.

But in a letter to state legislators, Ameren and Noranda said the bill will establish caps on rate increases and utility profits, ensure a transparent process and will allow a more rapid grid modernization effort.

"Under the status quo, electric rates have risen through a series of unpredictable spikes over the last eight years while our electric infrastructure has been aging faster than it is being replaced," they wrote. "This creates an unacceptable environment in which customers are exposed to higher risks of outages and rate spikes, but providers are penalized for accelerating strategic investments to modernize Missouri’s electric grid."

Under the new proposal, utilities would be allowed to set rates based on last year's expenses. And the St. Louis Post-Dispatch reports Ameren Missouri currently earns a 9.53% return; the proposed return in the legislation is 9.45%, but if the utility meets certain goals, the rate can be higher.

Ameren and Noranda are also making it a jobs issue. They say that policies adopted domestically and internationally have made the smelter's energy costs uncompetitive. "If Noranda’s energy costs are not reduced to a globally competitive level the smelter is unlikely to restart production," they told lawmakers.

Representatives from Ameren, along with Kansas City Power and Light and Empire District Electric, will meet today with the PSC to discuss the proposal.