As early as Wednesday, Missouri's Public Service Commission officially could reject Noranda Aluminum's complaint that Ameren Missouri has earned more money than the PSC allowed when setting the utility's rates almost two years ago.
"I don't see that the evidence supports that Noranda has met its burden of proof to establish that Ameren's current rates are unjust and unreasonable," PSC Chairman Robert Kenney told colleagues at a Sept. 10 agenda meeting, where they made verbal findings in the case.
All five commissioners agreed.
Seven months ago, Noranda asked the commission to find that Ameren Missouri "is currently overearning at a rate of $44.6 million per year over its authorized rate of return on equity of 9.8 percent."
Noranda's aluminum smelter at New Madrid is the single biggest electricity consumer in Missouri, and Ameren is the state's largest regulated electric company with more than 1.2 million customers.
In its seven-page Feb. 12 complaint, the Tennessee-based aluminum company said it had "compelling evidence" that the PSC's authorized rates are too high, allowing Ameren's overearnings at "a rate of $67.1 million per year, or over $5.6 million per month."
The commission approved Ameren's current rate plans in December 2012, to go into effect Jan. 1, 2013.
Those rates reduced Ameren's allowed "return on equity" (ROE) to 9.8 percent rate from the previous 10.2 percent.
During hearings in July, Noranda presented its overearnings evidence based on "surveillance reports" that Ameren is required to file quarterly, because the company has the PSC's permission to use a "fuel adjustment clause" and change its rates several times a year, as its costs for fuel change.
Greg Meyer, a former PSC Staff member who now works for a St. Louis County company that does consulting work for Noranda, told Ameren's lawyers: "The history of your company is, you've had prolonged overearnings ... since June 2012."
But Commissioner Steve Stoll said during the Sept. 10 agenda meeting: "I don't think that all the facts are available through the surveillance reports."
And Commissioner Daniel Hall added: "It's important to understand that the commission's rate-making system is designed to establish rates, to allow the utility to recover a specified amount of revenue."
That revenue requirement is intended to allow a company "to recover its prudently incurred expenses and receive a reasonable return on its investment," he added. "This system envisions that revenues, expenses and profits will fluctuate - sometimes significantly - going up, going down, month-to-month, year-to-year, but evening out over time."
John Cassidy - the PSC Staff's lead auditor, or case coordinator, on Ameren rate cases - told the commissioners during the July hearings: "Staff believes that, at this point, no party has made a full assessment of all the relevant factors, so no real determination for the purposes of re-setting rates has been reasonably presented."
He also said the staff always should do a complete rate study on any overearnings complaint, and those detailed studies require four or five months.
In a regular rate case, the PSC must make a decision within 11 months after the utility files the request.
Chairman Kenney noted Noranda's complaint didn't have the same legal deadline, but that Noranda asked "for a decision by Sept. 26 and, to the extent that we're able to accommodate that, I think it's a good idea to act expeditiously."
Discussions like the one commissioners had Sept. 10 help the staff lawyers write the final orders that the PSC then adopts.
The final orders are approved during those regular agenda meetings, and the next one is scheduled for 9:30 a.m. Wednesday.