A bill that could drastically change the way Missouri utility rates are set is speeding toward passage after receiving overwhelming support from a state House committee on Monday. The bill, which aims to repeal a 1976 law banning construction work in progress (CWIP) charges on utility bills, is now set to be debated in the full House, potentially reaching Gov. Mike Kehoe by the end of the week.

The proposed legislation would allow utility companies to charge customers for power plants that are under construction but not yet operational, specifically for new natural gas plants. The 1976 law, passed by initiative petition, was created in response to concerns over rate hikes related to the construction of a nuclear power plant in Callaway County. With the bill already passing the state Senate, its next step is full House approval.

State Senator Mike Cierpiot, who is sponsoring the bill, said he doubts the CWIP provision would apply to nuclear power plants, although he acknowledged the possibility for future consideration. “I was asked to have nuclear CWIP in this bill, and I actually don’t think that’s a horrible idea, but I think it’s kind of 15 years off before we actually start deploying those,” Cierpiot said.

The bill passed the House Utilities Committee by a 17-4 vote, with two Democratic members joining 15 Republicans in support, while three Democrats and one Republican opposed the measure.

Opponents of the bill argue that the CWIP provision would lead to significantly higher electricity bills for consumers, possibly adding up to $1,100 annually. “This bill is not designed to benefit Missourians,” said Gretchen Barwick, director of the Missouri chapter of the Sierra Club. “It’s designed to provide corporate welfare to monopoly utilities.”

Utility representatives, including those from Evergy, which provides power to western Missouri, argue that the bill is essential to meet the state’s growing energy demands and encourage investment in new power plants. Jason Klindt, senior director of external affairs at Evergy, emphasized that large industrial users will pay for their share of the costs, helping to lower rates for residential consumers. “We look forward, frankly, to announcing new power plants if we can get this bill across the finish line,” Klindt said.

The bill would apply to investor-owned utilities regulated by the Public Service Commission (PSC) and also allow utilities to set rates based on future expected costs rather than only past expenses. Critics, however, argue that this could lead to higher rates, as utilities could pre-approve their costs without a thorough examination of past spending.

While the bill includes some provisions intended to protect consumers, such as requiring utilities to repay customers for CWIP charges if plants don’t go live, opponents argue that these measures won’t be enough to offset the potential rate hikes.

Rich Germinder, policy advisor to the PSC, noted that Missouri's growing demand for electricity, driven by the rise of electric vehicles and the construction of data centers, justifies the need for CWIP. “Everyone was caught unprepared for the demands of the increased load growth that we’re seeing,” Germinder said.

Opponents of the bill warn that its provisions will only exacerbate rising costs for consumers. Diana Plescia, attorney for the Missouri Industrial Energy Consumers, called the bill the most expensive legislation ever passed by the Missouri legislature, predicting it would increase rates by 40-80%. “The damage to our economic base in Missouri will be real,” Plescia said, adding that it would lead to lost jobs and deter new investment in the state.

As this legislation moves closer to final approval, its potential impact on Missouri consumers and the state's economy remains a key point of contention.

Originally reported by Rudi Keller in Missouri Independent.