In our view: Utilities and rates

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April 14, 2010

Anonymous The Joplin Globe Wed Apr 14, 2010, 07:30 AM CDT

Both Empire District Electric and Missouri American Water are applying for rate increases locally to the Missouri Public Commission. Public outcry against such increases is being heard in various public forums. As always there are two sides to the story that deserve attention.

First and undoubtedly, there are people living “on the edge” financially that will be hard- pressed to absorb any rate increases for such services. Something, probably something important, will be given up to accommodate the extra money spent on utilities.

Second, any public utility must be able to earn a reasonable profit to sustain the growth in consumption of its product demanded by all customers. With no profit, investment and thus expansion of production and compliance with new environmental requirements go away. The result could be blackouts, low water pressure in emergencies and/or legal fines and penalties for environmental violations.

The utilities must make a clear and convincing case that rate increases are limited to that required to sustain reasonable profits for future investment. The job of the PSC is to ensure that any rate requests meet that mandate. Let’s assume for a moment that BOTH do their jobs well in requesting and approving such increases.

If that is the case and rates inevitably go up, what should all residents do about it?

The answer to us at that point is simple conservation. Consumers must learn to reduce their individual demand for energy and water.

Do we have the money for a big screen monster or can we afford a TV in all bedrooms and the kitchen? Seldom do we ask the cost of electricity to operate all of those TVs and in fact leave a lot of them on simultaneously with no one watching.

Small potatoes for sure when electrical costs are low, but it can make a difference when they go much higher. Where we set the thermostat in summer and winter also can matter, a lot. There are many more examples to be considered.

The currently requested increases are a drop in the bucket compared with what is looming on the horizon. If cap and trade is implemented, new environmental requirements are put in place or foreign supplies diminish, future rate increases will be huge.

We should all develop better energy consumption habits before those events occur rather than have the market do it for us.