JEFFERSON CITY, MO. (AP) -- Missouri regulators have approved a $172 million increase in electric rates for Ameren Missouri, but the power company will not be permitted to recover costs it sought to rebuild the Taum Sauk reservoir.
The Public Service Commission approved the rate increase Wednesday on a 5-0 vote.
The company had requested an increase of more than $200 million.
Regulators decided against letting Ameren Missouri add part of the cost for building the new Taum Sauk reservoir into the rate base that is collected from electric customers over time. In December 2005, the original Taum Sauk reservoir collapsed. That sent a billion gallons of water down a southeastern Missouri mountain.
St. Louis-based Ameren Missouri is the state's largest electric utility with about 1.2 million customers, mostly in eastern and central Missouri.
Release from Missouri Public Service Commission issued Wednesday:
JEFFERSON CITY---The Missouri Public Service Commission has voted to grant an electric rate increase of approximately $172 million to Ameren Missouri, approximately $91 million less than what the company requested in its September 2010 filing. The rate increase reflects Ameren Missouri's increase in costs to provide service to its customers. The Commission's vote was unanimous, 5-0.
In its decision, the Commission denied Ameren Missouri's request to include any of the cost to rebuild the upper reservoir of the Taum Sauk plant to rate base. In this case, Ameren Missouri sought to add approximately $89 million to rate base. After the December 2005 Taum Sauk incident, Ameren Missouri took full responsibility and promised to protect its ratepayers from the consequence of that collapse. "The Commission intends to hold Ameren Missouri to that promise," said the Commission.
As part of its decision, the Commission set Ameren Missouri's return on equity (ROE), or profit margin, at 10.2 percent. In this rate case, Ameren Missouri sought an ROE of 10.7 percent.
When Ameren Missouri filed its rate request with the Public Service Commission on September 3, 2010, it sought to increase annual electric operating revenues by approximately $263 million. The company cited costs associated with energy infrastructure investments, higher fuel costs for its power plants (such as coal and transportation of coal to its power plants) and the installation of two scrubbers at its Sioux Power Plant as major reasons for seeking a rate increase. The Sioux Power Plant scrubbers are designed to remove in excess of 95 percent of the sulfur dioxide gas generated by the plant as well as removing oxidized mercury, sulfur trioxide, particulate, hydrogen chloride and hydrogen fluoride. Ameren Missouri installed the scrubbers at the plant to comply with various federal clean air rules.
Ameren Missouri attributed approximately $200 million of the proposed increase to energy infrastructure investments, environmental controls and other reliability costs to meet customer expectations for more reliable and cleaner energy.
The PSC staff estimates that the impact on the typical residential customer will be approximately $8.00 a month. It is expected that new rates will take effect in August.
In its order deciding the rate case, the Commission accepted a joint position by several parties in the rate case which will continue current funding levels on Ameren Missouri's low-income weatherization programs. The Commission's order also encourages Ameren Missouri to continue to provide energy efficiency programs.
Ameren Missouri provides electric service to approximately 1.2 million electric customers in Missouri.
Statement issued Wednesday by the Fair Energy Rate Action Fund:
Today's Decision By The PSC To Allow Ameren Another Rate Increase
Statement By FERAF Executive Director Chris Roepe
“This rate increase will make it that much harder for Missouri families and businesses to recover from this economic downturn. This ruling shows precisely why consumers need to have a greater voice in the ratemaking process moving forward. Our coalition will continue to lead the fight to protect a balanced ratemaking process that will hopefully produce stable, low –cost rates for Missourians. While the overall ruling by the PSC will have serious economic ramifications for Missouri, the commission should be commended for rejecting Ameren’s bid to have ratepayers pay for the cost of rebuilding the Taum Sauk reservoir. After four rate increases in the past four years it is now incumbent on Ameren to become more efficient at a time when Missouri families and businesses can least afford future rate hikes.”
(Copyright ©2011 by The Associated Press. All Rights Reserved.)
TV Station Profiles & Public Inspection Files forKTVO