COMMITTEE ON LEGISLATIVE RESEARCH
OVERSIGHT DIVISION
FISCAL NOTE
L.R. NO.: 1507-01
BILL NO.: SB 432
SUBJECT: Utilities; Consumer Protection
TYPE: Original
DATE: March 12, 2001
FISCAL SUMMARY
| FUND AFFECTED | FY 2002 | FY 2003 | FY 2004 |
| Public Service Commission* | $0 | $0 | $0 |
| Total Estimated
Net Effect on All State Funds |
$0 | $0 | $0 |
*Assumes costs of $112,021, $222,002 and $210,608 in FY 02, FY 03 and FY 04, respectively, and an increase in the PSC assessment and appropriation, resulting in a net effect of $0.
| FUND AFFECTED | FY 2002 | FY 2003 | FY 2004 |
| None | $0 | $0 | $0 |
| Total Estimated
Net Effect on All Federal Funds |
$0 | $0 | $0 |
| FUND AFFECTED | FY 2002 | FY 2003 | FY 2004 |
| Local Government | $0 | $0 | $0 |
Numbers within parentheses: ( ) indicate costs or losses
This fiscal note contains 5 pages.
ASSUMPTION
Officials from the Department of Economic Development - Public Service Commission (PSC) assume the proposed legislation would have no fiscal impact on their agency. However, the proposal could have some impact to the PSC from the perspective that the PSC would likely lose some or even all Federal Grant funds for gas safety. Also, additional legislation that may be passed respecting the funding and staffing of the Board could create a cumulative fiscal impact to the agency.
Oversight assumes the proposal is silent regarding the placement of the new Missouri Energy Reliability Board. For purposes of this fiscal note, Oversight is assuming the Board would be placed under the PSC. Oversight has estimated travel expenses for the board members at $9,021 annually. This is based on the assumption of four meetings per year for two days each.
Based on discussions with the PSC in the 2000 session in reference to a similar proposal, $100,000 should be adequate for outside consultants to assist in the development of the required standards as identified in this proposal; therefore, for purposes of this fiscal note, Oversight increased this amount for inflation and has reflected a cost of $103,000 in FY 02 for the consultants.
As in a similar proposal from the 2000 session, Oversight assumes the PSC would need three additional staff members (3 FTE) as a result of this proposal . These staff would include one Utility Regulatory Economist III, one Utility Regulatory Engineer I and one Legal Counsel, with related fringe, expense and equipment. Oversight assumes the additional FTE could be located using existing space and therefore, has not included rental costs in the fiscal impact specifications below. Costs for the FTE are not shown until FY 03. It is assumed the staff would not be needed to support the Board until after the standards were developed and approved.
Additionally, Oversight assumes the PSC would increase the assessment to utilities and that appropriation would be made, resulting in a net effect of $0.
Officials from the Department of Economic Development - Office of Public Counsel (OPC) and the Department of Labor and Industrial Relations (DOL) assume the proposed legislation would have no fiscal impact on their agencies.
Officials from the Department of Natural Resources assume the duties of the board are complementary to, but to do not directly impact, the Missouri Department of Natural Resources' Energy Center.
ASSUMPTION (continued)
Oversight assumes IF the requirements of this proposal would result in a change in utility rates, state government agencies, local governments and small businesses could be fiscally impacted.
FISCAL IMPACT - State Government FY 2002 FY 2003 FY 2004
PUBLIC SERVICE COMMISSION FUND
Costs - Public Service Commission (PSC)
Personal Service (3 FTE) $0 ($130,261) ($133,518)
Fringe Benefits $0 ($43,416) ($44,502)
Expense and Equipment ($112,021) ($48,325) ($32,588)
Total Costs - PSC ($112,021) ($222,002) ($210,608)
Revenue - PSC
Assessment to utilities $112,021 $222,002 $210,608
ESTIMATED NET EFFECT ON
PUBLIC SERVICE COMMISSION FUND $0 $0 $0
FISCAL IMPACT - Local Government FY 2002 FY 2003 FY 2004
$0 $0 $0
FISCAL IMPACT - Small Business
Small businesses could have a direct fiscal impact as a result of this proposal to the extent of changes to the operating requirements and potential rate changes to electric or gas users. Also, it could require additional paperwork and additional benefits for workers as part of a worker transition plan in the event of a closure or reorganization of the utility company.
DESCRIPTION
This proposal creates the Missouri Energy Reliability Board to standardize the reliability, safety, and customer services practices of investor- and consumer-owned electric and gas companies. A DESCRIPTION (continued)
seven member board shall be appointed by the Governor with the advice and consent of the Senate. The Board's authority supercedes that of the Public Service Commission when there is a conflict.
The Board shall establish procedures to prevent overloads on systems and cost-shifting and report to the General Assembly every two years on the adequacy and reliability of the electric supply.
The Board shall establish minimum maintenance standards for all electric or gas companies and require companies to file an annual preventive maintenance plan with the Board, shall establish minimal performance standards and shall establish reliability and maintenance service standards for worker safety and minimum customer service standards.
Any company undertaking significant downsizing, merger, or other similar transaction must prepare a workers transition plan within 180 days of the final date of the transaction. The
company must inform affected employees prior to filing the final plan, and file notice with the Board of any action that will result in layoffs. The succeeding entity shall recognize and work with the union representing the employees after the merger or other transaction if the company is party to a collective bargaining agreement recognized by federal or state law. The succeeding entity will refrain from making unilateral changes in the employees' terms and conditions of employment for a period of three years or until the existing contract expires, whichever is
later.
The proposal has an emergency clause.
This legislation is not federally mandated and would not require additional capital improvements or rental space. However, this proposal would result in duplication. The PSC safety jurisdiction, under Sections 386.310 and 394.160, and reliability, service, performance, information and customer service jurisdiction, under numerous Chapter 386 and Chapter 393 sections, are replaced or duplicated by the Missouri Energy Reliability Board.
SOURCES OF INFORMATION
Department of Economic Development - Office of Public Counsel
Department of Economic Development - Public Service Commission
SOURCES OF INFORMATION (continued)
Department of Labor and Industrial Relations
Department of Natural Resources
Jeanne Jarrett, CPA
Director
March 12, 2001