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Ameren Missouri seeks 14.6 percent rate hike

Ameren Missouri seeks 14.6 percent rate hike

February 3rd, 2012 in News


Associated Press

ST. LOUIS (AP) - Customers of Ameren Missouri would see their average monthly electric bills rise about $14 under a rate increase proposal filed Friday with the Missouri Public Service Commission.

Ameren Missouri asked regulators to raise electric rates by $376 million, or 14.6 percent. Company leaders said the increase necessary to pay for work to reduce outages, infrastructure upgrades and environmental improvements, as well as to offset higher fuel costs. A consumer group said the increase would create a hardship for many struggling Missouri families.

The PSC could take up to 11 months to review the request. Ameren Missouri serves customers in the St. Louis region and parts of eastern, central and southern Missouri.

Warner Baxter, chairman, president and chief executive officer for St. Louis-based Ameren Missouri, said the utility has spent $3.2 billion since 2007 to upgrade an aging infrastructure, including millions on a tree-trimming program to help prevent outages. Air pollution near power plants is being reduced.

"Our customers have consistently told us that reliability is their highest priority and that they also want cleaner air," Baxter said. "Over the last several years, we have made significant investments in our infrastructure that are producing results."

If approved, the increase would be Ameren's fifth in six years. But Baxter said the money has been well-spent, citing 27 percent drops in both the number of outages and in sulphur emissions. Meanwhile, he said, power plant performance has improved.

But Joan Bray, president of the Consumers Council of Missouri, said the latest rate increase is stunning given the struggles of the economy.

"This would be another blow to consumers," said Bray, a former state lawmaker from suburban St. Louis. "It almost takes my breath away.

"We will be making every effort to try to get the best deal we can out of this for the consumers because we have been hit hard, and at a terrible time for everybody's pocketbook," she said.

Ameren officials said budget billing and energy assistance programs are available for needy customers.

Baxter said the company's electric rate increases haven't kept pace with inflation over the past two decades. Ameren's current electric costs, he said, are just 12 percent higher than 1991 - inflation in general is up 65 percent nationwide over that same period. And he also said Ameren's rate is 16 percent less than the average rate in neighboring states.

Lewis Mills, the state public counsel who represents customers before PSC, was out of the office Friday and did not return a message seeking comment.

Ameren said the rate increase would break down this way:

-$85 million for investments that have already improved reliability and helped the company comply with environmental and renewable energy regulations.

-$103 million to offset higher fuel costs.

-$81 million for recently proposed energy-efficiency programs that the company believes will provide $500 million in customer benefits over the next two decades.

The remainder for other cost increases related to things such as materials and employee benefits.

Baxter said Ameren has been cutting costs since the recession hit in 2008 in an effort to keep rates down. He said 2011 expenditures were more than $300 million less than in 2008. About 340 jobs were eliminated last year through a voluntary severance program.

Among Ameren's recent projects is a Renewable Energy Center in suburban St. Louis that will take methane gas from decaying trash at a landfill and use it to generate renewable electricity - enough to meet the needs of about 10,000 homes.

Ameren is also seeking to recover costs from several major storms, including an April tornado that tore through St. Louis County.