Special session completes the ‘Mill Bill’

As I outlined in my last report, the legislature was called back into special session to address the Mill Bill, a bill to grant permission to the Public Service Commission (PSC) to allow Ameren to offer an aluminum plant and a steel plant in SE Missouri a discounted electrical rate.

Since electric companies like Ameren and KCP&L have a monopoly on providing electricity, the PSC was set up as the consumer watchdog to keep electrical rates in check. Neither Ameren, KCP&L, nor any municipal-run electric company can raise electric rates on its customers without getting permission from the PSC.

Electric cooperatives like United Electric, Farmers’ Electric, and Grundy Electric are not regulated by the PSC since they are run by boards that are elected by their customers, and if these boards raise rates on their customers they are also raising rates on themselves.

Some interesting facts about this issue are:

• Noranda (the previous aluminum mill that recently went bankrupt) employed about 800 people. These jobs were lost in the most impoverished area of our state when Noranda closed.
• Noranda’s electric bills were about $18 million per month. Smelting aluminum takes a lot of electricity.
• Magnitude 7 (the company that bought Noranda’s assets from bankruptcy) will reopen the aluminum plant and create about 400 new jobs
• A separate steel plant operated by a different company will create about 100 jobs
• The jobs created will reduce poverty in the area, and lessen the need of government assistance
• All 500 of the jobs will pay between $60,000 and $150,000 per year. That equates to roughly $40 million in annual payroll
• That payroll will produce several million in taxes, which will go to fund schools, senior programs, transportation and other duties of government

When every House and Senate member is present in a special session, the cost to the taxpayer is from $20,000 to $25,000 per day. Therefore, special sessions should only be called for issues that cannot wait until next year’s regular session. Knowing the limited time that Missouri had to secure these jobs before the companies involved decided to look to other states, the governor felt a special session was warranted in this case.

Because some of the days of a special session are for a very limited purpose, only a few members came when needed. Only those sponsoring and referring bills in the House were in session May 22. Committee members arrived and worked Tuesday. The full House was at the capitol only on Wednesday. This keeps the cost impact to the taxpayer at a minimum.

The House passed the Mill Bill (HB1) on Wednesday. The Senate began work on it Thursday and passed it on Friday with no changes to the bill. Once the governor signs the bill, it will become law and jobs will be created.