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Although Ameren UE won’t be getting the $251 million rate increase it asked the Missouri Public Service Commission (PSC) for last April, the state regulatory agency has granted the utility a rate hike of about $162.6 million.
This marks the second time in the past two years PSC has approved an electric rate increase to Ameren UE. The last increase was also a fraction of what the utility asked for: in May of 2007, PSC awarded $43 million of the $361 million Ameren UE had requested.
In 2007, Ameren appealed the rate increase, complaining it was too small, and both the Missouri Office of State Counsel and then-Attorney General Jay Nixon appealed the increase, arguing it was completely unwarranted.
Cole County Circuit Judge Richard Callahan ruled in favor of PSCs decision in 2007, ignoring Nixon’s assertion Ameren UE should lower its rates instead.
Although PSC awarded the latest rate increase Tuesday, the media have remained largely silent on the latest rate increase, watching and waiting for the appeals that are sure to come.
PSC has issued a press release stating the commission’s vote was a close 3-2 in favor with Chairman Robert M. Clayton III and Commissioner Kevin Gunn dissenting.
Although Ameren UE had also lobbied to overturn a state law that prohibits rate increases directly tied to construction of new power plants, and State Senator Delbert Scott (R) had filed a bill to throw out the prohibition voters approved in 1976, in the end PSC upheld the law. The PSC news release explains, “The commission rejected Ameren UE’s request to include certain Calloway II [nuclear plant] construction and operating license application costs in electric rates.”
The PSC news release further advises, “Based on the commission’s decision, the PSC staff estimates the average monthly bill for a residential customer will increase by approximately $5.88 (8.1 percent).”
Ameren UE had asked for a 12 percent increase, which would have increased the average monthly bill for residential customers by about $9.
The utility anticipates that, in the absence of appeals, the latest rate increase will become effective on March 1.
The $162.6 million that was approved will go toward covering Ameren’s increasing costs associated with tree/vegitation trimming, infrastructure inspections, and service reliability.
To further ensure that power lines will remain intact during storms, Ameren UE has been incurring costs associated with running those lines underground in areas of the state particularly susceptible to the ravages of nature. Ameren UE has also been awarded a fuel adjustment clause (FAC) that enables the utility to increase rates to cover rising fuel costs without being required to submit to a PSC rate hearing.
Ameren has said that the cost of buying and transporting coal accounts for over 20 percent of its total costs, and that some mechanism needed to be available to help the utility keep pace with those escalating expenditures.
The FAC will be listed separately on customer bills, making it easier to track how much more consumers are paying for fuel increases as they will be a charge above the base rate.
Although Ameren UE didn’t receive what consumer advocate Missourians for Fair Electric Rates (MFER) labeled a “blank check” to build a nuclear plant in violation of state law, the utility now has a mechanism allowing it to raise rates to keep pace with rising fuel costs without the time and trouble associated with requiring a PSC rate hearing.
Ameren UE CEO Thomas Voss had told the St. Louis Post-Dispatch that without being able to pass along to consumers costs associated with building Calloway II, the utility “just couldn’t do it [i.e., build the new nuclear plant].”
“The risk would be too great,” Voss had said. “We don’t think people would lend us the money. We don’t think our board of directors would approve it. And we don’t think our stockholders would think it’s prudent.”
Midwest Coalition for Responsible Investments’ Sister Barbara Jennings had countered, “If an investment in Callaway II is not prudent for their stockholders, it is certainly imprudent for rate payers who do not receive a return on investment.”
But in the end, neither the Ameren lobbyists nor Senator Scott had their way, and consumers won’t being paying for an unbuilt plant that hasn’t generated a watt of power...and may never.
Voss says of the latest rate increase, “We know it’s not going to be popular, and we know it’s going to be a burden on some of our customers, and we wish we wouldn’t have to do that. We went long periods without doing it. But this in response to what we’ve heard customers say: ‘We want you to be investing in the business. We want more reliable service than we’ve had in the past.’”
But consumer groups see the latest rate increase as something being forced upon rate payers who have no other recourse than to cow-tow to a company that monopolizes the energy they must have.
Ameren UE, which serves 1.2 million Missourians, now has, according to MFER, “33 registered lobbyists in Jefferson City and gave over $240,000 to Missouri politicians in campaign contributions in 2008.”
Although Ameren UE won’t be getting the $251 million rate increase it asked the Missouri Public Service Commission (PSC) for last April, the state regulatory agency has granted the utility a rate hike of about $162.6 million.
This marks the second time in the past two years PSC has approved an electric rate increase to Ameren UE. The last increase was also a fraction of what the utility asked for: in May of 2007, PSC awarded $43 million of the $361 million Ameren UE had requested.
In 2007, Ameren appealed the rate increase, complaining it was too small, and both the Missouri Office of State Counsel and then-Attorney General Jay Nixon appealed the increase, arguing it was completely unwarranted.
Cole County Circuit Judge Richard Callahan ruled in favor of PSCs decision in 2007, ignoring Nixon’s assertion Ameren UE should lower its rates instead.
Although PSC awarded the latest rate increase Tuesday, the media have remained largely silent on the latest rate increase, watching and waiting for the appeals that are sure to come.
PSC has issued a press release stating the commission’s vote was a close 3-2 in favor with Chairman Robert M. Clayton III and Commissioner Kevin Gunn dissenting.
Although Ameren UE had also lobbied to overturn a state law that prohibits rate increases directly tied to construction of new power plants, and State Senator Delbert Scott (R) had filed a bill to throw out the prohibition voters approved in 1976, in the end PSC upheld the law. The PSC news release explains, “The commission rejected Ameren UE’s request to include certain Calloway II [nuclear plant] construction and operating license application costs in electric rates.”
The PSC news release further advises, “Based on the commission’s decision, the PSC staff estimates the average monthly bill for a residential customer will increase by approximately $5.88 (8.1 percent).”
Ameren UE had asked for a 12 percent increase, which would have increased the average monthly bill for residential customers by about $9.
The utility anticipates that, in the absence of appeals, the latest rate increase will become effective on March 1.
The $162.6 million that was approved will go toward covering Ameren’s increasing costs associated with tree/vegitation trimming, infrastructure inspections, and service reliability.
To further ensure that power lines will remain intact during storms, Ameren UE has been incurring costs associated with running those lines underground in areas of the state particularly susceptible to the ravages of nature. Ameren UE has also been awarded a fuel adjustment clause (FAC) that enables the utility to increase rates to cover rising fuel costs without being required to submit to a PSC rate hearing.
Ameren has said that the cost of buying and transporting coal accounts for over 20 percent of its total costs, and that some mechanism needed to be available to help the utility keep pace with those escalating expenditures.
The FAC will be listed separately on customer bills, making it easier to track how much more consumers are paying for fuel increases as they will be a charge above the base rate.
Although Ameren UE didn’t receive what consumer advocate Missourians for Fair Electric Rates (MFER) labeled a “blank check” to build a nuclear plant in violation of state law, the utility now has a mechanism allowing it to raise rates to keep pace with rising fuel costs without the time and trouble associated with requiring a PSC rate hearing.
Ameren UE CEO Thomas Voss had told the St. Louis Post-Dispatch that without being able to pass along to consumers costs associated with building Calloway II, the utility “just couldn’t do it [i.e., build the new nuclear plant].”
“The risk would be too great,” Voss had said. “We don’t think people would lend us the money. We don’t think our board of directors would approve it. And we don’t think our stockholders would think it’s prudent.”
Midwest Coalition for Responsible Investments’ Sister Barbara Jennings had countered, “If an investment in Callaway II is not prudent for their stockholders, it is certainly imprudent for rate payers who do not receive a return on investment.”
But in the end, neither the Ameren lobbyists nor Senator Scott had their way, and consumers won’t being paying for an unbuilt plant that hasn’t generated a watt of power...and may never.
Voss says of the latest rate increase, “We know it’s not going to be popular, and we know it’s going to be a burden on some of our customers, and we wish we wouldn’t have to do that. We went long periods without doing it. But this in response to what we’ve heard customers say: ‘We want you to be investing in the business. We want more reliable service than we’ve had in the past.’”
But consumer groups see the latest rate increase as something being forced upon rate payers who have no other recourse than to cow-tow to a company that monopolizes the energy they must have.
Ameren UE, which serves 1.2 million Missourians, now has, according to MFER, “33 registered lobbyists in Jefferson City and gave over $240,000 to Missouri politicians in campaign contributions in 2008.”
