MSD charter panel weighs proposal to have PSC set sewer district’s rates

Panel will seek further input on PSC rate-setting proposal; seems to favor existing process

By EVAN YOUNG

Members of the Metropolitan St. Louis Sewer District’s charter review committee are trying to determine the most credible channel through which to set the district’s rates.

The Plan Amendment Commission is considering a charter change that would place establishing MSD wastewater and stormwater rates into the hands of the Missouri Public Service Commission.

Currently that responsibility falls on the district’s Rate Commission, which was established in 2000 and is comprised of 15 organizations selected by the district’s Board of Trustees.

Each organization appoints one delegate to participate in the rate-setting process.

The League of Women Voters, the Regional Chamber and Growth Association, the St. Louis County Municipal League and FOCUS St. Louis are among the groups with representation on the Rate Commission.

The commission is an “advisory board with teeth,” MSD Executive Director Jeff Theerman said. While the Board of Trust-ees has the final say on rate changes, it’s required by the MSD charter to adhere to the Rate Commission’s recommendations if the suggested rates meet a series of guidelines outlined in the charter.

During the rate-setting process, the Rate Commission receives legal and financial advice from consultants it selects but MSD pays, district officials said.

Proponents of changing the process contend the Missouri PSC, which is based in Jefferson City, would be more independent and knowledgeable than the district’s Rate Commission, Theerman said. PSC members are appointed by the governor and currently regulate investor-owned utilities — including some sewer utilities.

However, Theerman said opponents of the switch believe the rate decision-making process should be kept local, and that the PSC process would be more expensive and less responsive to the St. Louis region’s needs.

State law would have to change for the PSC to determine MSD rates because the commission currently has no authority over public utilities, Theerman said.

Therefore, the amended MSD charter still would have to provide for a district Rate Commission but be flexible enough to hand over the rate-setting process to the PSC if lawmakers revised the appropriate statute.

In a Dec. 16 letter to the Plan Amendment Commission, St. Louis County Municipal League Executive Director Tim Fischesser stated the district’s current rate-setting process “seems inordinately legalistic and expensive” but his organization did not recommend moving the process to the “very political” PSC.

“We encourage a much simpler process whereby the Rate Commission can understand the financial needs, reflect community values, act relatively quickly with transparency and then determine if proposed rate increases are generally reasonable,” Fischesser wrote.

The Plan Amendment Commission subsequently voted last week to solicit further written input from area organizations on the issue, particularly those that are in favor of moving the rate-setting process to Jefferson City.

However, committee members seemed inclined at the outset to keep the district’s rate-setting process local.

“While there obviously are people that feel the Rate Commission isn’t working, there are a whole lot of people that don’t think the Public Service Commission is working,” said Plan Amendment Commission member Alan Richter last week, noting the controversy over AmerenUE’s proposed 18-percent electric rate increase, which the PSC is considering. “… I’m not sure that there’s any kind of a body of thinking that overwhelmingly feels the Public Service Commission is the solution.”

Member James Webb said opponents of the current process appear to have a bad perception of it but have not raised a “legitimate problem to be solved.”

“I’ve yet to understand any specific problem we’re trying to cure. It’s always a case of ‘what-if.’ I don’t think we can solve ‘what-ifs,'” Webb said. “… We manage perception by (public relations), not by changing documentation or changing procedure.

“We just have to address a lack of information … So I’m still searching for the problem to be solved. I haven’t seen it yet.”