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Appeals court upholds 2012 ruling on Ameren rate

Appeals court upholds 2012 ruling on Ameren rate

October 17th, 2013 in News

Public Service commissioners made the right decisions last year when they approved new electric rates for Ameren Missouri, a state appeals court ruled Tuesday.

Last December, the PSC approved a $260.2 million rate increase for the St. Louis-based utility, which serves 1.2 million Missouri customers - including Jefferson City.

Ameren Missouri had asked for a $375.6 million rate increase, so the PSC's order approved only 69.3 percent of the request.

But several consumer groups challenged the PSC's decision to let Ameren use the Fuel Adjustment Clause (FAC) process to bill customers for expenses the utility pays to the Midcontinent Independent System Operator Inc. (MISO).

The FAC allows a utility to change customers' bills without requiring PSC approval or a rate hearing.

The three-judge panel's opinion, written by Judge Mark D. Pfeiffer, noted MISO is the Federal Energy Regulatory Commission (FERC)'s "approved regional transmission organization," and that Ameren participates in MISO with the PSC's approval.

The relationship between Ameren and MISO is a key to the court's ruling backing the PSC decisions.

"Through its membership in MISO, Ameren Missouri has access to a transparent, wholesale energy market where it can acquire power to serve its load and sell power off-system," the court noted. "Network service enables Ameren Missouri to transmit energy acquired from the MISO market, including that injected by Ameren Missouri"s own generators, to its customers.

"MISO charges Ameren Missouri for the use of its service pursuant to a FERC-approved tariff (and the charges) must be paid by Ameren Missouri to use the system to serve load."

The consumer groups challenged the PSC decision to include long-term transmission services in the FAC process, arguing those costs should be approved only in a basic rate case.

But the court said the PSC correctly ruled that Ameren must be able to recover the transmission charges and using the fuel adjustment clause was the most logical manner.

The consumer groups raised three issues in the appeals court - that Ameren shouldn't count all of the electricity it gets from MISO as "purchased power," since some of it comes from the electricity Ameren generates into the grid; that the PSC should not have counted transmission charges when state law uses the word "transportation;" and that some of the MISO charges include construction work on the grid system, while Missouri law prohibits utilities from charging customers for "construction work in progress."

The appeals court rejected all three arguments.