SPECIAL COMMEMORATIVE EDITION Missouri Public Service Commission Publication VOL. 3 NO. 6 -- APRIL 2013 S S I ON OF I T M H M E O S C T A E T C E I O V F R M E I S S S 1CI00O L U B R UP I A Century Of Service PSConnection/100th Anniversary -- April 2013 •WHEREAS, the Missouri Public Service Commis- sion is a state agency created in 1913 now governed by Chapter 386 of the Missouri Revised Statutes; and • WHEREAS, the Missouri Public Service Commis- sion replaced the Board of Railroad and Warehouse Commissioners, which was established in 1875 to regulate railroads in Missouri; and • WHEREAS, the Missouri Public Service Commis- sion today regulates investor-owned electric, natural gas, steam, telephone, water and sewer utilities and manufacturers and dealers of manufactured homes and modular units; and • WHEREAS, the Missouri Public Service Com- mission employs a dedicated staff of attorneys, en- gineers, accountants, financial analysts and others who specialize in utility regulation; and • WHEREAS, the Missouri Public Service Commis- sion marks its 100th Anniversary in 2013; • NOW, THEREFORE, I, Jeremiah W. (Jay) Nixon, Governor, of the State of Missouri, do hereby honor the MISSOURI PUBLIC SERVICE COMMISSION whose work has a profound impact on the citizens of our state and recognize the agency on its centennial celebration on this 15th day of April, 2013. OM MISSION OF THE S E C TAT C E IVR1ES CIL0BUP 0IRU OSSIM F O PSConnection/100th Anniversary -- April 2013 11 Special 100th Anniversary Edition The Missouri Public Service Commission celebrates its 100th M IS SION OF TH M E Anniversary in 2013. This special edition is dedicated to O S C T the agency’s many employees who have served the State of CE ATE IV O Missouri over the years. RE M F 1S CI00O SSI LBUP IR U What’s Inside 3 ‘ONE OF THE NECESSITIES OF THE HOUR’ In his Inaugural Address in 1913, Gov. Elliott Major advocated for the creation of the Public Service Commission. 7 OUR HISTORY A snapshot look at the agency as chronicled in our Annual Reports to the General Assembly. 24 LOOKING BACK Reflections from five of the longest tenured employees of the Public Service Commission. To ensure that Missourians Our Mission: receive safe and reliable utility service at just and reasonable rates. PSConnection Staff Photo Credits/Thank You EDITOR: Kevin Kelly Photos appearing in this special publication were obtained from DESIGN EDITOR: Gregg Ochoa a variety of sources: PSC Annual Reports, The State Historical EDITORIAL BOARD Society of Missouri, Official State Manuals (Blue Book), Missouri Debbie Bernsen Kim Bolin State Archives, Ameren Missouri, The Empire District Electric Natelle Dietrich Gay Fred Company, Missouri-American Water Co., Laclede Gas Company, Kevin Kelly Missouri Telecommunications Industry Association, Capital City Lisa Kremer Gregg Ochoa Water Company, Jefferson City News Tribune, Library of Congress, Contessa Poole-King Nathan Williams Eisenhower Library and the New York Historical Society. 2 PSConnection/100th Anniversary -- April 2013 I n his Inaugural Address given on January 13, 1913, Missouri Governor Elliott Major advocated for the Public Service Commission. “A Public Service Commission is one of the necessities of the hour. The creation of such a commission is a progressive step which, in view of past experiences, every state must take. In dealing with questions arising as to our laws and orders of boards, affect- ing the public service corporations of the State, I have had perhaps as extensive an experience on account of the two- cent passenger fare and maximum freight litigation now being considered by the Supreme Court of the United States as any public official in the republic. The right of the State to regulate the charges and the conduct of every business impressed with a public use is no longer questioned. Practical experience has demon- strated that the laws in their pres- ent condition and the old methods are insufficient and inadequate to meet present day conditions. They have served a useful pur- pose, but we must now have new and improved legislative methods in dealing with pub- lic utilities, and the questions arising between them and the public. The reap-hook and the cradle were good and faithful servants, but gave way, in the march of progress, to the mower and binder. I, Excerpt from therefore, recommend the passage of an efficient public service Gov. Elliott Major’s commission law, with adequate powers given the commission 1913 speech. to fix and regulate freight and passenger rates, express rates, telegraph and telephone rates, the charges of electric light, gas, water and power companies, and all other public service corpo- rations doing business in the state. PSConnection/100th Anniversary -- April 2013 3 The commission should be given authority to supervise the issuance of In 1913, the Public Service stocks, bonds and other evidences of Commission consisted of indebtedness, and also be given the eight departments: further power and authority to ascertain • General Office the value of the physical properties of the • Legal public utilities coming within the provi- • Rate sions of the act. The enactment of such a law will not • Engineering only be to the interest of the public, but • Statistics and Accounts also to the interest of the utilities regu- • Gas, Electric, Heat and Water lated and controlled. A number of other • Telephone and Telegraph states, including New York and Wiscon- • Stocks and Bonds sin, have already enacted such a law, and it has proven to be exceptionally beneficial and satisfactory. The control of public service corporations is a fixed pol- icy of this State and government, and it is brought closer together and enjoy a better now an accepted axiom that the operation understanding of each other’s rights. The of a public utility is a public trust, subject people will look upon the service of such to the control of the State by fair and just a commission as their forum, where all regulatory measures. differences of opinion between the public The mutual harmonics and pleasant and the public service corporations will relations of all public utilities with the find a speedy and inexpensive adjust- public, the communities in which they ment. It will become a common and pop- operate, and the patrons of such utilities ular forum where justice can be had in its should be fostered and encouraged by simplicity and without the tortuous for- the administrative acts of the commis- malities and delays attending court pro- sion in disposing of and adjusting all cedure. A commission given such powers differences between the public and such will enjoy in a high degree the confidence utilities. In other words, the people and of the public and of the utilities coming the public service corporations should be within their supervision.” A Century of Service: Facts & Figures CE COMMISSION OF THE STATE roll TChoeu n4t7yt hS eGneanteorra Wl Ailslisaemm Bbluys pbays csreeda tlienggi stlhaet ioMnis sspoounrsi oPruebdl ibc yS eCra-r- IVR1ES CIL0BUP 0IRUOSSIM F O vPiucbel iCco Smemrviiscsei oCno.m Tmheis lsaiwon t roeopkl aecffeedc tt hoen BAoparirld 1 o5f, R1a9i1lr3o.a Tdh aen Mdi sWsaourer-i house Commissioners which had been established in 1875 to regulate railroads operating in Missouri. 4 PSConnection/100th Anniversary -- April 2013 Places We Have Called Home E COMMISSION OF THE STAT C E IVR1ES CIL0BUP 0IRUOSSIM F O 1913: Temporary State Capitol which was erected in 1912 on the east end of the grounds that now occupy the current Capitol grounds. After the first session, the Commission moved to quar- ters in the old Supreme Court Building until the State Capitol was rebuilt. The old Supreme Court Building was located where the Missouri Highway and Transportation Department stands today (1988 PSC Annual Report). 1917: Moved into the new State Capitol (shown under construction in the upper left photo). In the new State Capitol Building, the first story was occupied by the Public Ser- vice and Highway Commissions and other appointed offices. 1934: Commission moved to the former Federal Court House and Post Office Building, on the northwest corner of the intersec- tion of High and Jefferson Steets. The building was remodeled to suit the purposes and needs of the Commission (1935-1936 Official Manual, State of Missouri). 1951: Moved to 1983: Moved to the 2000: Moved the Jefferson Build- Truman State Office to the Governor ing (9th and 10th Building (5th and 8th Office Building. floors). floors). PSConnection/100th Anniversary -- April 2013 5 T F C he irst ommissioners John M. Atkinson John M. Atkinson, an attorney, was the first Chairman of the Missouri Public Service Commission. He was appointed by Governor Elliott W. Major on April 15, 1913 for a term of six years ending April 15, 1919. Mr. Atkinson was from Doniphan, Missouri, and had formerly served as the Speaker of the House of Representatives and as an Assistant Attorney General. Mr. Atkinson served until May 1, 1916, and was replaced by William G. Busby, a lawyer from Carrollton, Missouri, who was named Chairman of the Commission at the time of his appointment. Busby had sponsored legislation as a senator creating the Public Service Commission in 1913. John Kennish John Kennish, an attorney, from Kansas City, Missouri was appointed by Gov- ernor Major for a term of four years which ended April15, 1917. Mr. Kennish was a former Missouri Supreme Court Judge and State Senator. He left the Commission at the end of his term on April 15, 1917, but was ap- pointed to fill the unexpired term of David E. Blair when Blair became a Missouri Supreme Court Judge on August 23, 1920. Kennish resigned December I, 1920 and was replaced by John A. Kurtz, a Kansas City lawyer. Howard B. Shaw Howard B. Shaw, an electrical engineer, was appointed by Governor Major on April 15, 1913 for a four year term. At the time of his appointment, Mr. Shaw was Dean of the School of Engineering at the University of Missouri in Columbia. Mr. Shaw was replaced by Edward Flad on April 15, 1917. Frank A. Wightman Frank A. Wightman was a member of the Board of Railroad and Warehouse Commissioners prior to his appointment to the Missouri Public Service Commission by Governor Major on April 15, 1913. The Board of Railroad and Warehouse Com- missioners was abolished by the Public Service Commission Law. Mr. Wightman was a railroad expert from Monett, Missouri, and served until April 24, 1915. He was replaced by Eugene McQuillin, a St. Louis attorney. William F. Woerner William F. Woerner was an attorney in St. Louis, Missouri when he was ap- pointed to the Commission by Governor Major for a six year term ending April 15, 1919. Mr. Woerner's appointment came almost three months after the other four Commissioners had been appointed. Mr. Woerner resigned effective November 18, 1914 and was replaced by Edwin J. Bean, a lawyer from DeSoto, Missouri. DID YOU KNOW: The first appointments to the Public Service Commission were on the basis of one member to serve two years, two members to serve four years and two members to serve six years. After the expiration of the first terms, all member terms have been six years each. 6 PSConnection/100th Anniversary -- April 2013 O ur From regulating streetcars and railroads in 1913, to telephone divestiture and nuclear H power plants, the PSC has had a major impact isint MissoOuri throurghout tyhe 20th Century. 1913 • Created on April 15, 1913, the General Assembly abolished the former Board of Railroad and Warehouse Commissioners. All of the jurisdiction, su- pervision and records of the Board which extended to common carriers were transferred to the PSC. • At the close of the year, December 31, 1913, there were 877 corporations, municipalities and individuals engaged in serving the public in this State in some capacity that, by operation of the Public Service Commis- sion Law, placed them under the supervision and jurisdiction of the Commission. • The great variety of work involved requires scientific and technical knowledge, and the necessity that the Commission should be well and accurately served with the very ablest of experts in these mat- ters made imperative the selection of assistants of skill, learning, practical experience and good judgment. A Century of Service: Facts & Figures CE COMMISSION OF THE STATE cideFdi rbsyt tChaes Ce oFmilmedis:s iCona soen NAop. r1il. 2S5u,b 1m9i1tt3e.d “ Ionn tAhep rMil a1t6te, r1 o9f1 t3h ea nAdp pdlei-- IVR1ES CIL0BUP 0IRUOSSIM F O cisastuioen o of fr Jeofupnlidni n&g Pbiottnsdbsu.r”g Railway Company for an order approving an First Case Decided: Case No. 2. Submitted on April 16, 1913 and decided by the Commission on April 17, 1913. “In the matter of the Appli- cation of the Missouri, Kansas & Texas Railway Company for approval of a certain consolidated mortgage and for authorization of the issuance of bonds and authority to pledge said bonds as collateral security for the payment of a certain note.” PSConnection/100th Anniversary -- April 2013 7 • The work of the Commission, both in volume and variety of subjects, very soon grew to such proportions as made it imperative that there be installed an elaborate and up-to-date filing system of more than the ordinary classifi- cation of record papers. The system being installed is known as the decimal system. • The Commission held 127 sessions in its offices in Jefferson City and an additional 93 hearings on complaints held at various places in the State. • All public service corpora- tions seem to recognize that fair and just regulation by the State has come to stay and that such regulation is as much for their protection as for the protection of the public. 1914 • The number of subscrib- ers connected with the tele- phone systems of Missouri is approximately 500,000, which would indicate that approximately three million times each day the people of Missouri use the local telephone ser- vice, about thirty-four thousand times each day they use the long distance service. • The Commission recommends the submission of a constitutional amend- ment providing that all appeals from orders and decisions of the Public ABOVE: Missouri and Kansas Tele- Service Commission shall go direct to the Supreme Court, and providing the phone Company procedure of such appeals in such court. Such a constitutional amendment logo, 1899-1920. has been prepared and will be submitted to the Legislature for its consider- RIGHT: First Bell ation. pole on west side of Manchester Road in St. Louis (taken 1915-1916 in 1914). BELOW: St. Joseph Water • Future Regulations: One subject that should have early attention is the Company plant. issuing of uniform service extension rules. As the matter now stands each company or municipality makes and enforces its own rules regarding charges for extending mains or service pipes for water or gas, or line extensions and service wires to houses. The result is that there are almost as many policies followed as there are compa- nies and municipalities operating these plants. • In order to arrive at a decision as to the proper rates to be charged, it becomes imperative that the company’s transactions be recorded as prescribed in the Uniform Systems of Accounts and since it is not possible to properly educate the utility managers by mail, provision should be made for the employment of sufficient accountants to visit the utilities with a view of assisting and educating them in the proper operation of their plants. 8 PSConnection/100th Anniversary -- April 2013 • Nowhere has the change of attitude between the utilities and the pub- lic been better exemplified than in the informal complaints received by the Commission. Originally these complaints covered a wide latitude of cases, but now are nearly all confined to a few not well understood principles, such as charge for meter, or charge for extending service into new or unprofitable territory. Very few complaints now allege unjust or discourteous treatment. 1917 Capital City Water Co. in • Talk about the war and the abnormal rise in the price of materials and ap- Jefferson City was organized in 1888. By 1938, it served paratus. Among the first to be affected were the waterworks companies. The about 4,000 customers. chemicals used in clarifying and sterilizing water for public use are nearly all demanded in some form for war purposes. In consequence, the price within a few months increased from a few percent to more than a thousand percent for some chemicals. • Where formerly the rates filed with this Commission showed a healthy tendency toward a constant reduction, there are now almost daily requests for increases in rate schedules. These conditions lead to an in- crease in complaints. It is worthy of note that the complaints are not so much against exist- ing rates, as against the failure to get service, or against proposed increases in rates. 1919-1920 • Unfortunately, the war came on soon af- ter regulation by the State Commission was established, resulting in necessary and unavoidable increases of rates by the Com- mission which has brought about criticism of the State Commission Act, and a demand for its repeal from certain quarters not altogether Mills Crew, The Empire District Electric Company fair and unprejudiced. The demand now most frequently heard is for a re- (1923). turn to the old system of municipal regulation, but this would be a backward and unfortunate step for the people of the State to take. A Century of Service: Facts & Figures E COMMISSION OF THE STAT When a utility company was granted a rate increase by the IVCR1ES CIL0BUP 0IRUOSSIM FE O Crtheoveme PnmSuiCes ssS iaotannf,df .t he Wxapth ecenonmseevpsea wrn iyitt hafi pltehpdee adPreSetCda. i alTe dhu otfiislnietay rn eccpoiomarlpt ssa twnaytee rhmea erdne tvasi e sowuf feifitdsc ibeyn t decrease in operating cost, the Commission did not set a formal hearing. Instead, the Commission made a phone call. The company was told it could stand a rate reduction and they could either agree with the Commission’s reduction or request a formal hearing. Although some protested, most accepted the rate reduction. (1921-22 Annual Report) PSConnection/100th Anniversary -- April 2013 9