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Missouri

Talking About Rates: AARP and Utilities Seek Understanding

AARP continues to oppose rate hikes considered harmful to older residents

Missouri State News October 2010

Retired teacher Carlene Davis of St. Louis pays her bills in a small sunroom lit by natural light in order to save electricity. AARP Missouri opposed recent rate hike requests by Ameren UE and Kansas City Power & Light Co., and has been working with the utilities on ways to lessen the impact on low-income people. — Jennifer Silverberg

After Kansas City Power & Light Co. filed a $190 million rate increase request this year, company executives met with AARP Missouri.

"They presented their needs and their case," said Craig Eichelman, AARP Missouri senior state director. "At the end of the day we said this is one of the things we should act on."

AARP decided to oppose the increase before the Missouri Public Service Commission.

It's a familiar stance for AARP Missouri, which has fought against utility rate increases throughout the state. But the adversarial relationship with big power companies has softened.

"It's a much better scenario than nobody talking to each other," Eichelman said. That was the case last year after Ameren UE requested a $402 million increase for customers in the St. Louis area. AARP opposed the rate hike and joined with large industrial users in a public campaign called the Fair Energy Rate Action Fund to fight it.

In May, the PSC approved a $226 million increase, far less than Ameren sought. The commission also required the company to establish programs for low-income customers, including a pilot program next summer to offer financial incentives to get older people to use their air conditioners during heat waves.

Norma Collins, AARP Missouri's advocacy director, said such programs could avert the deaths of people who don't use their air conditioner during heat waves because of the cost. "We hope they will turn on those air conditioners and save lives."

Last year, KCP&L, which serves about 583,000 customers in Missouri, reached out to AARP for get-acquainted meetings that set the stage for this year's rate hike talks. Ameren UE has also met with AARP.

"It's a good development that the larger utilities in the state … would like a different relationship with AARP than they've had in the past," Eichelman said. "They realized we have built a reputation in the state. There usually isn't another consumer organization that intervenes in these things. They are expensive."

Chuck Caisley, senior director of public affairs for KCP&L, said talking with AARP was just common sense. "AARP's constituents are our customers, a group of customers that are active, informed … who care about the community."

Collins said many older Missourians are hit hardest by rate increases.

"When you have people on fixed incomes, that's a pretty huge blow to them," she said. "It really hits the pocketbook."

Carlene W. Davis, a retired St. Louis teacher, has lived in her eight-room house for 47 years. She cools the second floor of her home with room air conditioners, using fans to blow the cool air down to the first floor. She turns off the AC when she leaves. Even so, her electric bill was $162 in July.

"I felt like crying," said Davis, 77, about her reaction to the Ameren rate hike. "How unfair to people on fixed incomes, and with the economy the way it is."

Stories like Davis' are why AARP decided to intervene in the Kansas City case.

Although their talks with KCP&L didn't dissuade the company from pursuing its rate increase, they did result in discussions about how to market programs that give rebates to lower-income people.

People who believe they qualify should call the utility company or go online to the KCP&L financial assistance page or the Ameren Energy Assistance page for information.

Caisley said the hardship on people with fixed incomes "is something we're acutely aware of." He said the talks with AARP have focused on marketing the company's financial assistance programs for those customers. "I think you'll see us continue and potentially expand" those programs.

John Coffman, a lawyer who represents AARP in rate cases, said he expects the cost of KCP&L's new coal-fired power plant near Weston to be a major issue in the upcoming rate case, which he expects to be concluded early next year. Public hearings on the case will probably be held in December.

Tim Poor is a freelance writer based in St. Louis.

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