A new law signed by Missouri Gov. Mike Kehoe earlier this month features the subject of what is known as “construction work in progress” or CWIP.
It was a bill that critics contend will likely increase utility bills in Missouri. At the same time, some critics say it points out the deep ties by Kehoe with the utility industry. The issue of CWIP was raised this week by Oklahoma Corporation Commissioners during their discussion prior to a vote against some controversial energy bills in the legislature.
Under the measure signed into law in Missouri consumers will start paying for projects while they are still under construction. Oklahoma Corporation Commissioner Todd Hiett said Tuesday, such a plan in HB2747 and SB998 would likely not result in savings as professed by supporters of the bills. He contended such claimed savings “would be only realized by consumers years into the future—15 to 20 years down the road.”
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Missouri Governor Mike Kehoe signed off on his first major energy package earlier this month, a suite of policies likely to increase Missourians’ utility bills and corporate utilities’ profits, reflecting his deep ties to the industry.
Kehoe signed Senate Bill (SB) 4—the Missouri legislature’s omnibus utility bill—into law on April 9. The bill, led by Republican State Senator Mike Cierpiot and pushed by the state’s utilities, was roundly criticized by consumer advocates, environmental groups, and major energy users as likely to raise rates for Missourians to the tune of $1,115 annually for Missouri households.
“These monopolies are going to be able to pull a billion dollars out of my constituents’ pockets and transfer it to stockholders of these companies,” State Senator Tracy McCreery, a Democrat, said. While she negotiated some consumer protections into the bill, McCreery cautioned that they are not enough to offset SB 4’s significant impacts on utility costs.
The legislation has dozens of provisions, but the dominant drivers of customer cost increases are construction work in progress (CWIP), which allows utilities to charge for electricity generation plants before they are in service, and future test years for gas and water utilities, which allow utilities to use projected rather than actual costs when setting rates.