Boone County Assessor Tom Schauwecker has a question for the executives at Ameren Missouri.
“Would Ameren sell their natural gas assets for what they want them valued at?”
The answer to the question should have a bearing on three related debates going on regarding Ameren and the rates it ultimately charges customers for electricity. The investor-owned utility giant announced last week that it plans to seek an increase in rates, both for electricity and natural gas customers.
Because Ameren is a monopoly, it has to seek approval for such rate increases from the Public Service Commission. That’s generally just a speed bump, though. Changes to the law in the utility’s favor, and a weakened Office of the Public Counsel, which is supposed to represent consumers, have, over the years, turned Missouri’s regulators into a bit of a rubber stamp.
Ameren says it needs to raise your rates to fund new investments in the electrical grid, and that’s a good thing, so that a Texas-type failure doesn’t happen in Missouri. But as the left hand of Ameren seeks an increase in rates, its right hand is trying to save millions of dollars in tax payments that fund rural schools.
That’s what has Schauwecker upset. For several years now, his county and more than a dozen other counties across rural Missouri have been involved in a series of legal disputes with Ameren and Spire over the property taxes the utility companies pay on in-ground investments, such as the easements where natural gas lines are buried. County assessors have historically used a real-estate tax method to determine those taxes. Ameren has argued that those assessments are too high, and it has put millions of dollars that would go to school districts, fire districts and other government entities in escrow as the battle has waged in court and the State Tax Commission.
Until 2013, there was no dispute. But that year the utility started trying to get the assessments cut in half. “How could they agree with us all these years, and then want to depreciate by 50 percent all at once?” then-St. Francois County Assessor Dan Ward said when I first wrote of this dispute a couple of years ago.
The assessors have won most of the battles, but Ameren persists.
This year, as it prepares to seek another rate increase, it’s taken the battle to the Missouri Legislature, where the company’s gaggle of lobbyists and prolific campaign donations generally hold much power. Ameren is supporting Senate Bill 196, sponsored by Sen. Andrew Koenig, R-Manchester, which would classify their natural gas investments as personal property instead of as real estate.
The bill has passed a committee in the Senate. Were it to become law, it would likely wipe out the multiple lawsuits the utility monopoly is waging against county assessors, while reducing the company’s tax bills by millions of dollars.
“It’s counter-intuitive that these assets should be considered personal property,” Schauwecker says. “Real estate easements gain in value over time.” Whereas cars and boat trailers lose value year over year. That’s what Ameren wants. Lower taxes to build its bottom line.
“We care about keeping costs low for our customers and strive to protect them from unnecessary cost increases,” said Warren Wood, Ameren’s vice president of regulatory and legislative affairs, “including costs brought about by overpayment of property taxes on natural gas operations.”
The assessors, of course, say there is no overpayment, and they’ve spent years trying to make their case in court. Ameren is now using its deep pockets — courtesy of consumers — to open a new front in the battle, trying to get the Legislature to do its bidding.
“What this appears to be is an attempt to clear an enormous backlog of litigation,” Schauwecker says. “It’s certainly not fair.”