COMMITTEE ON LEGISLATIVE RESEARCH
OVERSIGHT DIVISION
FISCAL NOTE
L.R. No.:2265H.01I Bill No.:HB 963 Subject:Public Service Commission; Utilities Type:Original Date:January 27, 2025Bill Summary:This proposal modifies provisions for electrical corporations.
FISCAL SUMMARY
ESTIMATED NET EFFECT ON GENERAL REVENUE FUNDFUND AFFECTEDFY 2026FY 2027FY 2028Total Estimated Net
Effect on General
Revenue $0$0$0
*This bill could increase utility costs to state departments and local governments if rate changes
are made as a result of these new standards. Oversight assumes this would be an indirect impact
and therefore will not show the impact in the fiscal note.
ESTIMATED NET EFFECT ON OTHER STATE FUNDSFUND AFFECTEDFY 2026FY 2027FY 2028Public Service
Commission Fund
(0607)*($1,777,974)($2,002,162)($2,037,467)
Total Estimated Net
Effect on Other State
Funds ($1,177,974)($2,002,162)($2,037,467)
* Oversight assumes the fiscal impact will exceed $250,000 due to the Department of Commerce
and Insurance – Public Service Commission requesting 15 FTE to complete the integrated
resource planning. L.R. No. 2265H.01I
Bill No. HB 963
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January 27, 2025
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ESTIMATED NET EFFECT ON FEDERAL FUNDSFUND AFFECTEDFY 2026FY 2027FY 2028ESTIMATED NET EFFECT ON FULL TIME EQUIVALENT (FTE)FUND AFFECTEDFY 2026FY 2027FY 2028Public Service
Commission Fund
(PSC) 15 FTE15 FTE15 FTE
Total Estimated Net
Effect on FTE15 FTE15 FTE15 FTE
☒ Estimated Net Effect (expenditures or reduced revenues) expected to exceed $250,000 in any
of the three fiscal years after implementation of the act or at full implementation of the act.
☐ Estimated Net Effect (savings or increased revenues) expected to exceed $250,000 in any of
the three fiscal years after implementation of the act or at full implementation of the act.
ESTIMATED NET EFFECT ON LOCAL FUNDSFUND AFFECTEDFY 2026FY 2027FY 2028Local Government*$0 $0 $0
*This bill could increase utility costs to state departments and local governments if rate changes
are made as a result of these new standards. Oversight assumes this would be an indirect impact
and therefore will not show the impact in the fiscal note. L.R. No. 2265H.01I
Bill No. HB 963
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January 27, 2025
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FISCAL ANALYSIS
ASSUMPTION
Section 393.135
Officials from the Office of Administration - Facilities Management, Design and
Construction (FMDC) assume that this bill could increase utility costs to all state departments
and local governments if rate changes are made. Without additional information, FMDC is
unable to accurately calculate the impact of this bill; therefore, the impact is $0 to unknown.
Oversight assumes this proposal could increase utility costs to state departments and local
governments if rate changes are made as a result of these new standards. Oversight assumes this
would be an indirect impact and therefore will not show the impact in the fiscal note.”
Section 393.1090
Officials from Department of Commerce and Insurance – Public Service Commission (PSC)
state that this section Requires the Public Service Commission, to complete an integrated
resource planning proceeding for electrical corporations and publish a schedule for electrical
corporations to file an integrated resource plan every four years.
The PSC further states that Missouri is facing a significant resource adequacy challenge, which
roughly equates to "the ability of the power system, or the grid, to meet demand". As a result of
this challenge, the Missouri Public Service Commission hosted a Resource Adequacy Summit
called "PowerMO: Securing Missouri's Energy Future" in the Truman Building on August 13.
The Summit brought together several stakeholders including utilities, reliability organizations,
regional transmission organizations, regulators from other states, municipal and cooperative
utilities, and others to discuss the current challenges and put forward proposed solutions.
The current challenges include anticipated load growth due to economic development
opportunities (manufacturing and data centers/AI), extreme weather, federal regulations
including those aimed at reducing the amount of dispatchable generation available, market
forces, and ensuring a diverse generation resource mix. The solutions include:
(1) Fundamentally changing our Integrated Resource Planning Process to be more forward-
looking and allow more stakeholder input (modeled after Michigan);
(2) Creating a new State Reliability Mechanism which helps ensure that our electrical
corporations can meet their load obligations (also modeled after Michigan); and
(3) Modifying the accounting treatment of Construction Work in Progress (CWIP) for new gas
plants (this legislation passed in Kansas last session)and for new generation that is approved by L.R. No. 2265H.01I
Bill No. HB 963
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the Public Service Commission through the new Integrated Resource Planning Process, which
can reduce costs to ratepayers for building these new assets. Changing our processes to be able to
meet the needs of everyday Missourians, and better situate the State of Missouri to increase
economic development opportunities, will require additional personnel but will better position
the State of Missouri to meet the moment.
PSC has requested 15 FTE for integrated resource planning as shown below:
- These positions would generally be required if
the IRP process is expanded. As contemplated, Staff will be required to work with
stakeholders to determine what factors utilities should be considering when running their
IRP models as well as running its own plans to provide the Commission with alternative
scenarios. Staff will need to create additional departments to equitably spread out the
additional work that would be expected. While not confirmed at this time, it is
anticipated there would be departments that are focusing on load forecast modeling,
RTO/transmission issues, and supply side resources.
- Generally, these positions would be required to run the load forecast
modeling, to evaluate supply side resources including renewable technologies,
dispatchable technologies, storage technologies, and potential future generation
technologies that have not reached economic feasibility but may over the planning
horizons. Engineers would also be required to be involved with RTO and transmission
issues that would be included in IRP analysis. As noted in the list above, the engineering
positions would need to be broken down between senior level positions and junior level
positions to deal with the varying level of complexity required.
- With an IRP filing every year, as well as CCN (Certificates
of Convenience and Necessity) filings as a result of the new IRP legislation, a senior
project manager will be required to act as a coordinator for the various filings to ensure
that all of the components of Staff requirements are performed within the timeframes that
would be required under the legislation and Commission Order.
- The economist positions will look at economic assumptions under the
IRP, including future purchased power costs, natural gas pricing, and economic growth,
at a minimum, will require individuals with a solid background in economics and
economic analysis.
- Analysts would be required to review potential
environmental changes, federal and state regulatory changes and proposed changes, and
assist in gathering data from the various stakeholders. Data analysts would also assist in
reviewing utility filings to ensure that the utility provided the data necessary and
providing feedback. L.R. No. 2265H.01I
Bill No. HB 963
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Oversight does not have any information to the contrary. Therefore, Oversight will the show the
fiscal impact (15 FTE) as estimated by the PSC to the Public Service Commission Fund (0607).
Bill as a Whole
Officials from the Department of Natural Resources, the Missouri Department of
Conservation and the Missouri Department of TransportationMissouri House of
Representatives, and the Missouri Senate all assume the proposal will have no fiscal impact on
their respective organizations. Oversight does not have any information to the contrary.
Therefore, Oversight will reflect a zero impact in the fiscal note for these agencies.
Oversight only reflects the responses received from state agencies and political subdivisions;
however, other electric companies and coops were requested to respond to this proposed
legislation but did not. A listing of political subdivisions included in the Missouri Legislative
Information System (MOLIS) database is available upon request
Rule Promulgation
Officials from the Joint Committee on Administrative Rules assume this proposal is not
anticipated to cause a fiscal impact beyond its current appropriation.
Officials from the Office of the Secretary of State (SOS) note many bills considered by the
General Assembly include provisions allowing or requiring agencies to submit rules and
regulations to implement the act. The SOS is provided with core funding to handle a certain
amount of normal activity resulting from each year's legislative session. The fiscal impact for
this fiscal note to the SOS for Administrative Rules is less than $5,000. The SOS recognizes that
this is a small amount and does not expect that additional funding would be required to meet
these costs. However, the SOS also recognizes that many such bills may be passed by the
General Assembly in a given year and that collectively the costs may be in excess of what the
office can sustain with its core budget. Therefore, the SOS reserves the right to request funding
for the cost of supporting administrative rules requirements should the need arise based on a
review of the finally approved bills signed by the governor. L.R. No. 2265H.01I
Bill No. HB 963
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FISCAL IMPACT – State GovernmentFY 2026
(10 Mo.)
FY 2027FY 2028PUBLIC SERVICE COMMISSION
(0607)
Costs - PCS §393.1090 - p. 4 Personnel Service($983,982)($1,204,394)($1,228,481) Fringe Benefits($591,780)($719,601)($729,255) Expense & Equipment($202,213)($78,168)($79,731)Total Costs – PCS($1,777,974)($2,002,162)($2,037,467) FTE Change - PCS15 FTE15 FTE15 FTEESTIMATED NET EFFECT ON
PUBLIC SERVICE COMMISSION
(0607)($1,777,974)($2,002,162)($2,037,467)
Estimated Net FTE Change to the
Public Service Commission Fund15 FTE15 FTE15 FTE
FISCAL IMPACT – Local GovernmentFY 2026
(10 Mo.)
FY 2027FY 2028$0$0$0
FISCAL IMPACT – Small Business
Small businesses could have an increase in utility cost as a result of this proposal.
FISCAL DESCRIPTION
This bill authorizes an electrical corporation to include in the corporation's rate base any amounts
recorded to construction work in progress for any new natural gas generating unit. The Public
Service Commission will determine the amount of construction work in progress as specified in
the bill. Base rate recoveries arising from the inclusion of construction work in progress in base
rates are subject to refund.
These provisions will expire on December 31, 2035, unless the Commission determines that
good cause exists to extend these provisions through December 31, 2045. The secretary of the
Commission must notify the Revisor of Statutes if the conditions for the extension have been
met. L.R. No. 2265H.01I
Bill No. HB 963
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The Public Service Commission may also require electrical corporations to provide
documentation reflecting an electrical corporation's plan to own sufficient capacity to meet the
electrical corporation's obligations for the upcoming and three subsequent planning years. An
electrical corporation must submit documentation reflecting it's capacity position, as specified in
the bill.
The Commission may require additional audits and reporting necessary to determine whether an
electrical corporation's plan provides for its ownership or contractual rights to sufficient capacity.
If an electrical corporation fails to have sufficient capacity for the upcoming planning year and
the Commission determines the failure is the result of the corporation's imprudence, the
Commission may disallow any associated costs related to the failure. The Commission may also
require submission of a plan by the electrical corporation within six months to resolve any
expected capacity deficiency for the subsequent three planning years.
By August 28, 2026, the Public Service Commission, and every four years as needed thereafter,
must complete an integrated resource planning proceeding for electrical corporations as specified
in the bill.
No later than August 28, 2027, the Commission must publish a schedule for electrical
corporations to file an integrated resource plan every four years. Each integrated resource plan
must include an alternative resource plan meeting certain requirements. All alternative resource
plans must cover a minimum 16-year planning horizon and must reflect projections of an
electrical corporation's load obligations and how an electrical corporation would reliably meet its
projected load obligations. Additional requirements are specified in the bill.
After a hearing and no later than 360 days after the electrical corporation files an integrated
resource plan, the Commission must issue a report and order determining whether the electrical
corporation has submitted sufficient documentation and selected a preferred resource plan
representing a reasonable and prudent means of meeting the electrical corporation's load serving
obligations at just and reasonable rates. In making this determination, the Commission must
consider whether the plan appropriately balances factors specified in the bill. The Commission
may grant itself an extension for good cause for the issuance of the report and order. Up to 150
days after an electrical corporation makes its initial integrated resource plan filing, it may file an
update of the cost estimates if the cost estimates have materially changed.
If the Commission determines that the preferred resource plan is a reasonable and prudent means
of meeting the electrical corporation's load serving obligations, the determination will constitute
the Commission's permission for the electrical corporation to construct or acquire the specified
supply-side resources that were reflected in the implementation plan. When the electrical
corporation files an application for a certificate of convenience and necessity to authorize
construction or acquisition of the resources, the Commission will be deemed to have determined
that the resources are necessary or convenient for the public interest. L.R. No. 2265H.01I
Bill No. HB 963
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If the Commission determines that the preferred resource plan is not a reasonable and prudent
means of meeting the electrical corporation's load serving obligations, the Commission will have
the authority to specify in its report and order the deficiencies in the preferred resource plan. The
procedures for an electrical corporation to cure the deficiencies is specified in the bill.
If approved in a proceeding granting permission and approval to construct an electric plant, an
electrical corporation may in certain circumstances be permitted to include in its rate base any
amounts recorded to construction work in progress for the investments for which permission is
granted. The inclusion of construction work in progress will be in lieu of any applicable
allowance for funds used during construction that would have accrued from the effective date of
new base rates that reflect inclusion of the construction work in progress in rate base. The
Commission must determine the amount of construction work in progress that may be included
in rate base.
This legislation is not federally mandated, would not duplicate any other program and would not
require additional capital improvements or rental space.
SOURCES OF INFORMATION
Department of Commerce and Insurance
Department of Natural Resources
Missouri Department of Conservation
Missouri Department of Transportation
Office of Administration - Facilities Management, Design and Construction
Office of the Secretary of State
Missouri House of Representatives
Joint Committee on Administrative Rules
Missouri Senate
Julie MorffJessica HarrisDirectorAssistant DirectorJanuary 27, 2025January 27, 2025