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Our Opinion: Regarding rate hike increase, focus on what is 'reasonable'

Our Opinion: Regarding rate hike increase, focus on what is 'reasonable'

July 26th, 2012 in News

If comments we have received are any indication, the trend of sparsely attended public forums may be reversed next week.

Ameren Missouri's request for a 14 percent increase in electric rates will be the subject of a public hearing hosted by the Missouri Public Service Commission (PSC). The forum will be at 6 p.m. Monday in Room 310 of the Governor Office Building, 200 Madison St.

The PSC is obligated to accept public comment before acting on the proposed rate hike, requested by Ameren Missouri in February. The proposal would increase the utility's revenues from electric service by about $375.6 million annually. The PSC translates the increase into a 14 percent hike, or about $14 monthly for average residential customers.

A sampling of comments from recent letters, as well as our Facebook and websites, indicates customers do not find the request to be fair. Comments include:

• 14 percent? This house got a 2 percent raise from the governor. Come on give us a break.

• I am a single female, and am very conscious about my use of electric. I can't afford an increase. If my paycheck increases 14 percent, then I will.

• We are prisoners of this increase, and with poverty on the rise many will have to survive with what is gouging on their part.

• The PSC has agreed to patronize Ameren customers by pretending to listen to their economic concerns and then vote to approve the increase anyway.

• Well here we go again with the "so-called" Ameren rate hike public forum. If this forum is anything like the last one, it will be a farce. The Missouri Public Service Commission will be deeply involved with this charade as they previously were.

We're not willing to characterize the forum as a farce or charade, but the public deserves to be aware of the criteria used by the PSC to evaluate the rate hike.

Ameren Missouri is an investor-owned utility and the PSC is obligated, by state law, to authorize a reasonable rate of return for investors.

What, then, are the more persuasive talking points consumers can voice at the public forum?

Missouri Public Counsel Lewis Mills points out the PSC must determine if a requested increase is "just and reasonable."

The general economic climate, stagnant household income, home values and service issues are among topics considered by the PSC during deliberations.

Based on past cases, the approved rate increase typically is some fraction of the original request.

People who plan to participate at the forum will be most persuasive if they are informed, prepared and focused.