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Amendment 4 could cut power rates, increase local generation.

September 30, 2002
By: Jason McLure
State Capital Bureau

Jefferson City -

Supporters of a ballot measure to deregulate municipal power production say its passage could cut electric rates while reducing dependence on expensive, out-of-state power.

Amendment 4 would remove regulatory hurdles for municipalities looking to join together to build power plants. Current state law requires that the Public Service Commission regulate electricity rates of power produced by plants owned by two or more municipalities, but not by a utility owned by a single municipality.

The commission would continue to regulate power produced by privately-owned utilities such as Ameren UE.

Frank Stork, CEO of the Association of Missouri Electric Cooperatives, said that dependence on out-of-state power contributed to California's crisis in 2000, during which blackouts left traffic signals dead, air conditioners idle and hospitals running on back-up generators.

Stork said he expects passage of the amendment will spur smaller towns to join together to build larger power plants. He said this would lead to lower rates for the towns due to economies of scale.

"You can't build a bunch of little power plants, because it costs too much to operate," Stork said. "But if they can pool those municipal bonds and build a larger power plant or partner with another entity, they can produce power much cheaper."

Though passage of Amendment 4 could smooth the way for more municipally-operated power plants, Ameren UE, Missouri's largest private utility, has not voiced opposition to the amendment.

According to Eve Lissik of the Missouri Joint Municipal Electric Commission, privately-owned utilities such as Ameren UE and KC Power & Light account for 70 percent of the electricity generated in the state. Electricity co-ops produce another 17 percent, with municipal operators adding the remaining 13 percent.

Lissik said that though passage of Amendment 4 could increase the share of power produced by municipalities, its effect would be insufficient to warrant opposition from Ameren UE or other investor-owned utilities.

Rep. Carol Jean Mays, D-Independence and chair of the utilities regulation committee, said that since there is no formal opposition to Amendment 4, the greatest chance of it failing in November is if voters do not understand the potential benefits of the law.