Holden vetoes rate legislation

Gov. Bob Holden has vetoed legislation that would have given Empire District Electric Co. of Joplin the ability to seek a special rate increase. The legislation would have enabled Empire to raise rates to cover price increases on natural gas the company buys to fuel electricity generation and gas used to make power that the company purchases at wholesale.

The governor vetoed the fuel-cost-recovery legislation, Senate Bill 387, July 11. The bill had passed unanimously in the state Senate and by a wide margin in the House this past session.

In his veto message, Holden said the legislation was not needed, was poor public policy and could lead to economic inefficiency in energy production.

"In effect, because these corporations can recover the costs of buying electricity, which are in turn affected by the cost of natural gas, the corporations are empowered to increase their rates on the basis of a single factor, the cost of natural gas," Holden's statement said.

"Creating a new process that allows for rate-making based on a single factor is unnecessary" and also "bad policy," the governor added.

"Another conclusion is that utilities that are able to pass the cost of natural gas on to consumers easily will have little incentive to utilize more cost-effective methods for creating energy," the veto message said.

Amy Bass, Empire's director of corporate communication, said the company was disappointed with the veto.

"We worked hard (for passage of the bill), we felt it was good for our customers and good public policy, and the legislature agreed" by giving it overwhelming approval, she said. "We're just disappointed the governor didn't agree."

Empire District Electric's service territory reaches to the Springfield area. The company owns a 60 percent share in a newly-constructed 500 megawatt natural gas-fired power plant that recently became operational, according to information from Empire. The remaining share is owned by Westar Generating Inc. of Topeka, Kan., a wholly owned subsidiary of Western Resources.

The Missouri Public Service Commis-sion last winter turned down Empire's request for an emergency rate increase after a dramatic rise in natural gas prices. The PSC ruled that the company hadn't demonstrated economic hardship that would merit an emergency rate adjustment.