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Missouri Electricity Bill Reduction Assistance Act

March 10, 2021
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WRITTEN BY Dr. Jenny Bratburd

The Missouri Electricity Bill Reduction Assistance Act (HB734 and similar to SB202) enables a financial process known as securitization. This is similar to loan refinancing, and reduces utility debt with ratepayer-backed bonds. Securitization can reduce financial burden on utilities and ratepayers for stranded assets, i.e., assets no longer expected to cover their costs, and has been used for early retirement of uneconomic coal plants and recovery from disasters.

Highlights

  • Securitization is a financial tool that would allow utilities to recover costs on stranded assets and potentially save money for ratepayers.
  • This financial process has been used in other states for retiring coals plants and recovering from disasters.
  • Utility securitization legislation is implemented in some form in 25 other states, which vary in consumer protections, carve outs for people potentially impacted by closed assets, and requirements for when and how securitization can be used (e.g., only for storm damage or other specific circumstance, etc.).

Limitations

  • There is limited peer-reviewed research on securitization legislation and the impacts for energy generation and costs.
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