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Small turnout for AmerenUE rate increase hearing
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By Kris Hilgedick khil@newstribune.com
People may say they are struggling to pay their bills, but only seven citizens shared their thoughts about a proposed 12.1 percent rate increase for AmerenUE customers Monday night. The event - one of 14 hearings in the company's service area - was held by the Public Service Commission in Jefferson City.
And two of the seven citizens - both customers of Empire Electric Company - recommended commissioners be sensitive to investors' concerns.
Representing the Missouri Utility Shareholders Association, John Houlehan of Kansas City noted his purpose in attending was “to educate as many people as we can about the investor's concerns.”
“Utility stocks, such as Ameren's, perform much better than Merrill Lynch or Lehman Brothers,” he said. “Elderly people use this as income.
“We're all not rich and drive big cars,” said Houlehan.
AmerenUE filed its request before the Missouri Public Service Commission in April, seeking to increase rates by about $241 million.
According to corporate officials, the increase would allow AmerenUE to continue reliability improvements and cover increasing costs for fuel, transportation and materials.
If approved, the electric company says the average household would see its monthly electric bill increase by about $8.66.
The staff of the Public Service Commission has recommended that revenues be increased by about $51.3 million, based on a mid-range return on equity of 9.5 percent for stock investors.
AmerenUE has requested equity returns of 10.9 percent.
The company also has requested permission to implement a fuel adjustment clause. If approved, the company could place a separate surcharge on customers' bills to reflect changes in fuel and purchased power costs. An adjustment clause would permit electric rates to rise and fall the way customers' gas bills do.
PSC staff oppose the implementation of the fuel adjustment clause, arguing while coal costs have risen, they are not as volatile as natural gas.
Jefferson City resident Richard Allen was particularly perturbed about the proposed adjustment clause.
“It's a very bad idea,” he said. “It's extremely alarming for anyone who remembers Enron.”
Allen noted big power companies negotiate multi-year contracts for the fuel they buy.
“A power company can say, ‘It doesn't matter what we pay. We're going to pass it on!' That's not right,” lamented Allen. “I want fuel and power buyers to negotiate the best deal. I don't want to remove their incentive to find good, long-term” sources.
Allen predicted such a clause “will become a huge part of (customers) utility bill.”
Al Mueller - Cole County Treasurer and a former PSC commissioner - would like to see energy conservation programs accompany any rate increases.
Mueller said residents could be encouraged to conserve energy by being rewarded, on their bills, by using appliances at off-peak times. And he wants the company to make it easier for customers - who might have a wind turbine, for example - to sell energy back to the company at a fair price.
“There are a lot of things that can be done with rates,” he suggested.
Mueller was also wary of excessive incentive packages for utility company executives.
Monday's meeting was held in conjunction with a hearing in Kirksville, where citizens could contribute their thoughts electronically.
Two residents of that city raised concerns that poorer, rural customers can not afford rate increases at this time.
And two of the seven citizens - both customers of Empire Electric Company - recommended commissioners be sensitive to investors' concerns.
Representing the Missouri Utility Shareholders Association, John Houlehan of Kansas City noted his purpose in attending was “to educate as many people as we can about the investor's concerns.”
“Utility stocks, such as Ameren's, perform much better than Merrill Lynch or Lehman Brothers,” he said. “Elderly people use this as income.
“We're all not rich and drive big cars,” said Houlehan.
AmerenUE filed its request before the Missouri Public Service Commission in April, seeking to increase rates by about $241 million.
According to corporate officials, the increase would allow AmerenUE to continue reliability improvements and cover increasing costs for fuel, transportation and materials.
If approved, the electric company says the average household would see its monthly electric bill increase by about $8.66.
The staff of the Public Service Commission has recommended that revenues be increased by about $51.3 million, based on a mid-range return on equity of 9.5 percent for stock investors.
AmerenUE has requested equity returns of 10.9 percent.
The company also has requested permission to implement a fuel adjustment clause. If approved, the company could place a separate surcharge on customers' bills to reflect changes in fuel and purchased power costs. An adjustment clause would permit electric rates to rise and fall the way customers' gas bills do.
PSC staff oppose the implementation of the fuel adjustment clause, arguing while coal costs have risen, they are not as volatile as natural gas.
Jefferson City resident Richard Allen was particularly perturbed about the proposed adjustment clause.
“It's a very bad idea,” he said. “It's extremely alarming for anyone who remembers Enron.”
Allen noted big power companies negotiate multi-year contracts for the fuel they buy.
“A power company can say, ‘It doesn't matter what we pay. We're going to pass it on!' That's not right,” lamented Allen. “I want fuel and power buyers to negotiate the best deal. I don't want to remove their incentive to find good, long-term” sources.
Allen predicted such a clause “will become a huge part of (customers) utility bill.”
Al Mueller - Cole County Treasurer and a former PSC commissioner - would like to see energy conservation programs accompany any rate increases.
Mueller said residents could be encouraged to conserve energy by being rewarded, on their bills, by using appliances at off-peak times. And he wants the company to make it easier for customers - who might have a wind turbine, for example - to sell energy back to the company at a fair price.
“There are a lot of things that can be done with rates,” he suggested.
Mueller was also wary of excessive incentive packages for utility company executives.
Monday's meeting was held in conjunction with a hearing in Kirksville, where citizens could contribute their thoughts electronically.
Two residents of that city raised concerns that poorer, rural customers can not afford rate increases at this time.
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ODF wrote on Sep 25, 2008 10:36 AM:
Work hard & pay your taxes - Millions on welfare depend on you!
Work hard & be happy - Annoy a liberal!
When the democratic party stops being for redistribution of $$ I work hard for and stops supporting the deadbeat welfare crowd, then I will look farther into whether or not they have any real ideas for the average hard-working American. "