Testimony in Support of Missouri SB 1411, HB 2207 & 2233
Testimony from:
Josiah Neeley, Senior Fellow, Energy, R Street Institute
Testimony in Support of Missouri SB 1411, HB 2207 & 2233.
Senate Committee on Commerce, Consumer Protection, Energy & Environment/House General Laws Committee
March 31/April 1, 2026
Chairman and members of the committee,
My name is Josiah Neeley and I am a Senior Fellow in energy policy with the R Street Institute. R Street is a nonprofit, nonpartisan, public-policy research organization with a mission to engage in policy research and outreach to promote free markets and limited, effective government including in relation to electric markets. I am here today to testify in support of SB 1411, which would open Missouri’s electric market to choice and competition. In other testimony, you have heard about the economic benefits that restructuring can bring to Missouri residents. I’d like to focus on another less discussed benefit of restricting: increased electric reliability.
In a restructured market, generation supply is open to competition, but the distribution system remains under a monopoly utility model. In the vast majority of cases, outages are not due to inadequate generation but rather to distribution-level events.[1] As such, these events are not affected by whether a state has a vertically-integrated or a restructured market.
Over the last decade, most generation-related outages have been associated with extreme weather events, most prominently Winter Storm Uri in 2021 and Winter Storm Elliot in 2022. When carefully examined, both of these events show how a restructured system leads to superior reliability performance.
Let’s consider Winter Storm Uri first. Texas is known as a free market state, and the blackouts there during Winter Storm Uri have often been blamed on the state’s restructured electrical market. But this is in correct. As indicated by the North American Electric Reliability Corporation (NERC), the Texas blackouts had to do with poor weatherization throughout the electric system, which a plurality of outages caused by failures of infrastructure and supply in the regulated natural gas system.[2] In addition, while much of Texas is open to competition, parts of the state (such as some co-ops, municipally owned utilities, and the non-ERCOT region of the state) remain under a vertically-integrated monopoly model. Research by the Baker Institute shows that power plants owned by these monopoly utilities had a higher rate of outages during Winter Storm Uri than did competitive generators.[3]
We see a similar story when we turn to Winter Storm Elliot. Vertically-integrated utilities were forced into rotating outages in Kentucky, Tennessee, and North Carolina, and outages would have been even more severe if not for the fact that these areas were able to import power from restructured markets in PJM.[4]
These results should not be surprising. Under a cost of service model, utilities make money by spending money, and the more they spend the more profit they make. By contrast, under competition generators make money by producing power, especially during times of greatest scarcity. The incentives for a competitive system to maintain electric reliability are thus greater than in a vertically-integrated system. This is in keeping with recent research showing that competition has led to a reduction in generator outages.[5] Restructuring is the best way for Missouri to ensure enhanced reliability for the state going forward.
For these reasons, R Street supports SB 1411. Thank you for allowing me to speak to you today, and I would be happy to answer any questions.
Thank you,
Josiah Neeley
Senior Fellow, Energy
R Street Institute
jneeley@rstreet.org
[1] Alison Silverstein et al., “A Customer-focused Framework for Electric System Resilience,” Grid Strategies, May 2018. https://gridprogress.files.wordpress. com/2018/05/customer-focused-resilience-final-050118.pdf.
[2] “FERC, NERC and Regional Entity Staff Report: The February 2021 Cold Weather Outages in Texas and the South Central United States,” Federal Energy Regulatory Commission, November 2021, pp. 15-18. https://www.ferc.gov/media/february-2021-cold-weather-outages-texas-and-south-central-united-states-ferc-nerc-and.
[3] Michelle Michot Foss et al., “The Texas Freeze Out: Electric Power Systems, Markets and the Future,” International Association for Energy Economics and Energy Forum, 2021. https://www.bakerinstitute.org/sites/default/files/2021-06/import/00-foss-online-texas-freeze-iaee.pdf.
[4]“Winter Storm Elliott,” PJM, Jan. 11, 2023. https://pjm.com/-/media/committees-groups/committees/mic/2023/20230111/item-0x—winter-storm-elliott-overview. ashx.
[5] Lucas W. Davis and Catherine Wolfram, “Deregulation, Consolidation, and Efficiency: Evidence from US Nuclear Power,” American Economic Journal: Applied Economics 4:4 (October 2012), pp. 194-225. https://www.aeaweb.org/articles?id=10.1257/app.4.4.194.