Partnership for affordable power

This month Frank Stork shares joins with Duncan Kincheloe of the Missouri Public Utility Alliance to encourage voters to support Amendment 4 on the November ballot.

Duncan Kincheloe

Frank Stork

by Frank Stork and Duncan Kincheloe

In just a few weeks, Missourians will be voting on Amendment 4. The Amendment is designed to save on the costs of strengthening the state’s electric resources. It would do this by promoting cost-sharing partnerships.

Amendment 4 deals most directly with municipal utilities, which now have special restrictions on partnership arrangements, but the proposal offers benefits for all Missouri energy consumers as well.

Missouri’s electric cooperatives and the electric utilities owned by Missouri’s municipalities have much in common. Both are owned and controlled by the people that they serve. Decades ago, wise planning by Missouri co-ops led them to join together to organize the generation and transmission co-ops and Associated Electric.

By partnering, they were able to build the power plants that shield co-op members from the wild prices that are too common in wholesale power markets these days.

Constitutional Amendment 4 would let the state’s municipal utilities do the same thing. Some would like to join together to develop new electric generation.

Amendment 4 is necessary for these power plants to be financed as joint projects and remain controlled locally instead of at the state level.

The amendment also promotes opportunities for partnership projects between or among municipal, co-op and investor-owned utilities, with each participant’s share regulated according to its own structure — municipal utilities by local officials, cooperatives by their members and investor-owned utilities by the state Public Service Commission.

These partnership opportunities would encourage broader joint planning to strengthen the state’s energy infrastructure. This will help us make sure that Missouri doesn’t become another energy-starved California.

Former Missouri Secretary of State Bekki Cook, former Auditor Margaret Kelly and former state Public Service Comission Chairman Karl Zobrist believe Amendment 4 will help Missouri avoid a California-style energy crisis. The three former state officials are among the leaders of the “Yes on 4 Committee” campaigning for voter approval of the constitutional amendment in November.

Missouri’s investor-owned utilities and rural electric cooperatives on an overall basis have enough power plant capacity to serve their customers.

However, most municipal utilities do not. The bulk of the 88 city-owned utilities are smaller systems that cannot economically build individual plants to meet their needs. They now buy electricity, often from out-of-state suppliers, and power contract costs are becoming unstable and expensive.

Thousands of Missouri families and businesses depend on city-owned utilities for electric service. These utilities can’t generate enough power to keep up with customer use. They need Amendment 4 so they can partner and catch up with their customers’ power needs most economically.

With electricity use expected to grow almost 20 percent over 5 years, every sector of the electric utility industry needs a plan to keep up with needs if Missouri is going to avoid what happened in California. Passing Amendment 4 would let that planning take place.

As the language on the ballot makes clear, Amendment 4 creates no new costs and provides potential savings of state revenue by preventing duplicate local and state regulation.

Unfortunately, the rest of the language on the ballot isn’t as clear about the content of the amendment, so voters will have to remember that Amendment 4 deals with utility projects. The text describing Amendment 4 on the November ballot will read as follows:

“Shall joint boards or commissions, established by contract between political subdivisions, be authorized to own joint projects, to issue bonds in compliance with then applicable requirements of law, the bonds not being indebtedness of the state or political subdivisions, and such activities not to be regulated by the Public Service Commission?

This measure provides potential savings of state revenue and imposes no new costs.”
Amendment 4 will affect only a limited portion of Missouri’s needs, so it is not a panacea for the state’s energy future. But its benefits will be felt in a number of ways:

• With energy costs rising, sharing expenses is a common-sense approach to saving money.
• Missouri will be less dependent on electric power generated in other states.
• Generating power locally will keep dollars and jobs in Missouri.
• Local generation makes power delivery more reliable.
• Missouri ownership of power generation helps keep rates more stable and affordable than if power is bought on volatile wholesale markets.
• New power plants fostered by the amendment are more likely to use cleaner and more environment-friendly technologies and fuels.
• Keeping regulation at the local level will avoid duplicative costs to the state.

At a time when much of the nation’s power industry has experienced turmoil, Missouri’s leaders have developed a sound and positive opportunity to save money and reinforce the state’s energy resources. Amendment 4 means common-sense partnerships for affordable power.

Call (573) 445-3279 for more information about Amendment 4.

As CEO of the Missouri Public Utility Alliance, Duncan Kincheloe serves as general manager of the Missouri Association of Municipal Utilities, the Missouri Joint Municipal Electric Utility Commission and the Municipal Gas Commission of Missouri.

Stork was executive vice president of the Association of Missouri Electric Cooperatives and a member of Three Rivers Electric Co-op.