AmerenUE

Missouri’s Public Service Commission is supposed to be an honest broker, fairly assessing the often conflicting interests of large utility companies and their customers.
That’s not how things have worked over the last few years. Instead, the playing field has tilted in favor of big utilities with their armies of lawyers and lobbyists. Customers have gotten the short end of the stick.
That might be about to change. Last week’s election victory by Gov.-elect Jay Nixon, a Democrat, will bring a fundamental realignment to the PSC. The commission soon will get a new chairman and, in April, at least one new member. That’s the natural time to rebalance the regulatory body’s approach.

One major item of business should be rules changes that will make closed-door meetings between commissioners and utility executives a thing of the past. Such unannounced meetings, from which consumer representatives are excluded, have occurred with alarming frequency over the last three years.
Soon after Jeff Davis became PSC chairman in 2005, he met behind closed doors with utility executives and Republican legislators and — by his own admission — helped broker a deal on legislation that allowed utilities to add surcharges to customer bills without a full rate hearing.
As recently as last year, Mr. Davis was forced to remove himself from commission consideration of a proposed merger between two Kansas City-area electric companies after documents emerged showing that he held private meetings with utility executives to talk about the deal. Mr. Davis also met privately with officials from AmerenUE while that huge company had a rate case pending before the commission.
Efforts in the Legislature to outlaw such contacts failed last year. But the PSC can and should rewrite its own rules to forbid such meetings, which are antithetical to transparent government.

The commission also should re-examine some recent decisions that threaten to weaken consumer protections.
For example, AmerenUE has been lobbying for the repeal of a law that requires new electric plants to begin operations before their owners can raise utility rates to pay for their construction. That measure was overwhelmingly approved by voters in the 1970s.
The law makes utility companies bear the risk of cost overruns and inefficient management that can bloat construction costs. AmerenUE argues that, without repeal, it would be unable to finance a new nuclear reactor in Callaway County.
Missouri Public Counsel Lewis Mills, who represents consumer interests in dealings with the PSC, asked commissioners to investigate all options for how best to finance the nuclear plant. AmerenUE opposed Mr. Mills’ request, arguing that it has not made a final decision to pursue the plant. Yet the utility already has asked the federal government for approval to build the plant, and it is asking customers — as opposed to stockholders — to cover millions of dollars in filing expenses.
The PSC turned down Mr. Mills’ request. It should reconsider that decision. By the time AmerenUE makes a final decision on proceeding with the plant in 2011, it would be too late to consider financing alternatives. Some alternatives have the potential to save ratepayers $5 billion, according to an expert from the public counsel’s office.
As attorney general, Mr. Nixon made a name for himself as a consumer advocate. Whomever he appoints to the PSC will face a difficult rebalancing task.
A commission operating in balance would not always side with consumers. But it wouldn’t always favor utilities, either.