The Associated Press
St. Louis Post-Dispatch, March 8
PSC needs to put gluttonous giants on a diet:
To understand the latest dispute between Ameren Missouri and its biggest electricity customer, Noranda Aluminum, think about pie.
Ameren, the investor-owned monopoly utility company, is always hungry. It likes pie.
When Ameren wants to charge more for the electricity you use, it asks the Public Service Commission for more pie. Over the past six years, Ameren has been gluttonously successful in grabbing a 43 percent bigger pie.
When rates go up, the PSC does a couple of important things. First, it sets a profit target for Ameren which the company isn’t supposed to regularly exceed. Second, it divides shares of the pie among all the consumers. Those consumers, from big industrial users of the most power to senior citizens on a fixed income, generally negotiate and come to consensus on which part of the pie they will fund.
The biggest consumers, such as the New Madrid aluminum smelter owned by Noranda, get the lowest rates. Other big manufacturing companies, like Boeing and Anheuser-Busch InBev, also pay less per kilowatt hour. Residential customers pay the most per kilowatt hour because it is less efficient to distribute electricity to individual homes than big manufacturing plants.
Usually, the consumers, big and small, gang up on Ameren to try to make the entire pie smaller.
That context is important in understanding two recent filings with the Public Service Commission by Noranda.
The company, which is owned by private equity giant Apollo Global Management, is asking the PSC to lower its rate, already the lowest rate in the state. Noranda currently pays a little more than 4 cents per kilowatt hour of electricity; it wants to cut that by 25 percent, to 3 cents.
For comparison, the rest of us pay a little more than 7 cents per kilowatt hour. Noranda also wants the PSC to declare that Ameren has been making more money than it is supposed to.
In many ways, the first request is just another case of a big company exerting its oversized influence to obtain a taxpayer (or ratepayer) subsidy. How big? The rate cut would shift about $500 million over 10 years onto the rest of us. For what Ameren calls its typical residential electric customer, that increase could cause a monthly bill of $104.50 to go up by about $2.09.
That doesn’t sound like a lot. But it adds up. So it’s curious that consumer groups aren’t making much noise about Noranda’s rate-cut request.
Joan Bray, executive director of the Consumers Council of Missouri, says this about Noranda: “They have been on the side of consumers.”
Indeed, that’s true. Hence Noranda’s second filing, which accuses Ameren of eating an extra helping of pie.
On behalf of all consumers, Noranda is asking the PSC to determine that Ameren has earned more than the 9.8 percent profit level set during the utility’s last rate case.
Ameren, through its vice president of legislative and regulatory affairs Warren Wood, denies it is taking in more profits than allowed by the PSC.
“The complaint is without merit,” he told us.
OK, then, why won’t Ameren simply open up its books?
That’s what the consumers have been asking them to do for months. It is something Ameren has done previously when accused of overearning, most recently in 2012. In fact, lawyers for parties to Ameren’s most recent rate case already have seen the confidential financial reports that ultimately will determine whether the PSC tries to order Ameren to reduce its rates. It seems highly unlikely that Noranda would file an expensive PSC overearnings case without already knowing the answer it seeks.
In effect, Noranda is asking the PSC to (a) first reduce the overall portion of pie that Ameren gets to eat, and then (b) also reduce the aluminum smelter’s portion of its pie.
The smelter argues it needs a lower rate to compete, pointing to several consecutive quarters of net losses. It says its competitors in other states have obtained even larger rate cuts. Noranda suggests that unless it gets its rate cut, it will have to fire employees or shut down completely.
That argument isn’t without merit, but it’s hard to swallow when Leon Black, the chief executive officer of Apollo, made $546 million last year, more than any other private equity firm boss. Here’s how Crain’s business magazine described his obscene haul:
“Mr. Black’s pay, which was in cash, was about 25 times higher than the amount awarded to Goldman Sachs CEO Lloyd Blankfein or JPMorgan Chase’s Jamie Dimon, who are paid mostly with stock. It is more than double the New York Yankees’ payroll and, for those keeping score at home, 10,702 times more than median household income in the U.S.”
This is the very picture of income inequality in America. For Mr. Black, $546 million wasn’t enough. He needs to squeeze a few more pennies out of grandma next year or he’s going to take his aluminum smelter and go home.
It’s distasteful. And, yet, without Noranda, who keeps Ameren’s runaway greed in check?
Our hope is that the PSC dials back the gluttony of both behemoths.
Save some pie for grandma.
Springfield News-Leader, March 5
Long’s travels excessive:
We are pleased that U.S. Rep. Billy Long is learning all he can about key issues by traveling around the country and the world.
We wonder, however, if those trips — eight of them over the past two years — might not be a little excessive. And we suggest that Long’s constituents in southwest Missouri might think his time would be better spent working right here at home.
Long is among the top travelers in Congress. These are not trips paid for by Long or by the taxpayers. Since ethics reforms in 2007 that prevent lobbyists from footing the bill, such trips are generally paid for by charitable or educational groups — or, as in one pricey trip to Azerbaijan, private foreign business.
Long defends the time he has spent traveling. “It’s important for members of Congress to travel,” he said. “We make decisions about the world.”
Long’s world travel last year included Shanghai, Istanbul and Baku, Azerbaijan. At each destination, he attended meetings with government officials and learned about trade issues and energy policies. Nationally, he visited Las Vegas twice, Philadelphia, Boston and Baltimore. On all but two of the trips, he was able to take his wife with him.
On what appears to be the most luxurious of all the trips, to the capital of Azerbaijan, the couple stayed at a luxury hotel on the Caspian Sea and dined in upscale restaurants, costing a total of $13,500 — paid for by Azpod, an Azeri energy company. The trip was arranged by the Humpty Dumpty Institute, a U.S.-based organization that “forges innovative public-private partnerships to find creative solutions to difficult humanitarian problems through a serious of unique programs,” according to its mission statement.
Long’s was only one of 36 congressional trips made to Azerbaijan in 2013. His position on the powerful House Energy and Commerce Committee appears to be the magnet for many of his invitations.
It is impressive that southwest Missouri’s congressman is powerful enough to be courted by foreign countries.
But Long needs to remember who sent him to Congress and turn his attention to domestic issues that impact the Ozarks.
Perhaps he could take a lesson from another powerful Missouri lawmaker, Sen. Roy Blunt. “Members that do travel need to be sure they can fully defend any outside group that’s involved.”
Since Long has claimed to know nothing about Azpod at all, he can’t really do that. Another reason to stay home.
St. Joseph News-Press, March 4
Rein in lawsuit awards:
Rural Missouri, even more than our big cities, needs reasonable limits on the amount of money people can receive from medical malpractice claims.
To understand this is to place individual suits for damages in perspective. No limits on damage awards eventually will negatively impact everyone who needs reasonably priced health care and access to care, including such in-demand services as obstetrics and other medical specialties.
And let’s face it, these problems will be magnified in already underserved rural areas that scrape to find and retain physicians and other medical professionals.
Those are facts. Our opinion tracks closely with these realities.
First, anyone injured at the hands of a medical professional should expect to get every dime due them for economic damages suffered. Among these entirely understandable and quantifiable claims are ones for the costs of past and future medical care, lost wages and expected losses of future earnings.
Second, a remedy also is needed for those persons who can establish they have suffered non-economic damages such as emotional distress or pain and suffering. But these hard-to-quantify losses require reasonable limits so as not to allow wildly erratic awards that on their face can seem both excessive and unfair.
In 2005, Missouri passed a successful reform law. In the seven years that followed, lawsuits against physicians dropped almost 58 percent, the state added nearly 1,000 doctors and liability insurance premiums fell $27 million, according to the Missouri State Medical Association.
That law, with a $350,000 cap on non-economic damages and no cap on economic damages, worked to drive down the cost of medicine and to encourage doctors to practice in our state — including in rural areas.
Our state Supreme Court two years ago struck down the previous cap on damages, but new legislation before the General Assembly seeks to reinstate the limits. We support this proposal because it both preserves access to justice for injured patients, while also preserving access to medical care.
Jefferson City News Tribune, March 7
State manual returning to print:
Count us among Missourians who are delighted the state’s official manual, the “Blue Book,” is returning to print.
Through a partnership with the Missouri Press Association (MPA), a printed version of the 2013-14 manual will be produced. The announcement was made March 4 by Secretary of State Jason Kander.
As a result of a legislative effort to save the state money, and fueled by an argument that everybody has Internet access, the manual has been available only online since 2011.
The Blue Book is the “go-to” manual for information pertaining to state government. It outlines the procedures and personnel in: the executive, legislative and judicial branches; state agencies; and boards and commissions. It also includes information about Missouri history, elections, organizations and more.
The manual is a much-used resource for journalists, but we believe it also is useful for anyone — particularly capital city residents — interested in state government.
Our collection of printed manuals, with some missing volumes, dates to 1909.
The manual earned its nickname because its cover traditionally has been blue. The most long-standing exception occurred during most of former Secretary of State James Kirkpatrick’s tenure. Kirkpatrick, who served from 1965-85, saluted his Irish heritage by publishing the book in green in the 1969-70, 1973-74 and 1977-84 editions. He deviated on two occasions, publishing the 1971-72 edition in black and gold to honor the University of Missouri and the 1975-76 manual in red, white and blue to commemorate the nation’s bicentennial.
The only other deviation from the traditional blue occurred in the 1993-94 edition when Secretary of State Judi Moriarty selected a mauve color.
MPA Executive Director Doug Crews acknowledged the practical and historical value of a printed state manual.
“We look forward to putting this comprehensive resource back into print,” he said. “Interacting with elected officials and government agencies is vastly easier with a Blue Book at your fingertips.”
He also referenced the volume’s role documenting the state’s history for future generations when he said: “One hundred years from now, a Blue Book on the shelf will still be easily retrievable and readable.”
We believe the abiding interest in history among Missouri and Jefferson City residents extends to restoration of a printed version of the Official State Manual.
And we look forward to adding it to our collection.