Missouri House Bill HB3455

Missouri 2026 Regular Session

• Introduced: 2/26/26

Caption

Repeals and modifies certain provisions relating to the regulation of public utilities

Summary

HB 3455 revises Missouri’s public utility ratemaking laws, primarily by changing how the Public Service Commission may treat construction work in progress (CWIP) and by expanding the use of future test years for certain utilities. The bill repeals and reenacts sections 393.135 and 393.150, which govern utility rates and commission review of proposed rates, charges, contracts, rules, and practices. Under the bill, charges based on construction costs or other pre-service costs for electrical corporations are generally prohibited as unjust and unreasonable, while the bill removes prior language that had allowed limited CWIP treatment for new natural gas-generating units. It also adds detailed procedures for gas, water, and sewer corporations to use a future test year in rate cases, including post-year reconciliations of rate base and certain expenses, refund obligations when actual amounts come in below projections, and commission rulemaking requirements to implement the new process. The bill also preserves commission authority to consider changes in business risk when setting allowed returns.

Impact

The bill would alter Missouri utility regulation by tightening the general prohibition on recovering pre-service construction costs in rates, while simultaneously creating a more structured framework for future test-year ratemaking for gas, water, and sewer utilities. It affects sections 393.135 and 393.150, and it interacts with other utility adjustment mechanisms and rate-recovery statutes by limiting how plant investments made during a future test-year period may be recovered and by requiring refunds or regulatory liabilities when projected costs exceed actual costs. The Public Service Commission would need to adopt implementing rules by July 1, 2027, and utilities, ratepayers, and intervenors in rate cases would be directly affected by the new reconciliation and review procedures.

Sentiment

Based on the bill text and the absence of recorded committee testimony or votes in the provided materials, the overall sentiment appears procedural and policy-driven rather than overtly partisan. The measure is framed as a technical ratemaking reform, suggesting support from those favoring clearer utility regulation and more predictable rate-setting, while also reflecting concern for customer protections through refund and review provisions. No formal vote history or hearing record is provided to indicate strong public opposition or endorsement.

Contention

The main points of contention are likely to be who bears the risk of utility construction and forecasting errors and how much cost recovery utilities should receive before projects are fully operational. Consumer advocates would likely focus on the bill’s prohibition on pre-service charges and its refund requirements, while utilities may favor the future test-year provisions because they can better align rates with projected costs and reduce regulatory lag. The removal of the prior CWIP allowance for certain generation projects and the limits on recovering plant investments made during the test-year period are the most likely flashpoints between ratepayer interests and utility interests.