Missouri Senate to consider bill proposing lower rates for aluminum smelter

Dive Brief:

  • A Missouri Senate committee yesterday approved a bill to allow Ameren Missouri to adjust rates for an aluminum smelting plant in the southeastern portion of the state, formerly operated by Noranda.
  • The House approved the measure earlier this week, and St. Louis Public Radio reports the full Senate will take up the measure today.
  • A similar plan was floated last year in an effort to make the smelting facility more competitive, but it failed to advance over concerns that too much rate oversight would have been stripped from the Public Service Commission.​

Dive Insight:

Missouri lawmakers believe allowing the PSC to negotiate lower rates with the company operating the aluminum smelting plant will create jobs in the state. Before the bill went to the Senate, the House added an amendment that would allow Ameren Missouri to negotiate rates with other large industrial consumers as well. 

“You could have a car company decide to build the largest new car plant in the world,” Rep. Jay Barne (R) told St. Louis Public Radio. “You could have a company with some new product that we’ve never heard of today that wants to come into Missouri 30 years from now.”

As for the smelting facility, St. Louis Post-Dispatch columnist Tony Messenger reports India's Sumangala Steel will be managing the plant.

Last spring, Noranda Aluminum told lawmakers that its 900-employee facility could potentially be restarted if it was allowed to purchase electricity at a lower price. Ameren and Noranda argued that policies adopted domestically and internationally have made the smelter's energy costs uncompetitive.

The bill proposed last session would have made rate increases largely formulaic, which caused lawmakers to balk.The proposal would have allowed utilities to set rates based on prior-year's costs, speeding the company's ability to invest in and modernize the distribution grid. The new version of the bill would require companies to prove they need the lower rate to be competitive.

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