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PSC looks for answers in unusual cases

PSC looks for answers in unusual cases

April 9th, 2014 in News

Editor's Note: Please see the correction at the bottom of this article.

Missouri's five-member Public Service Commission is trying to figure out how to handle what Commissioner Steve Stoll called its "unusual" cases - Noranda Aluminum's twin requests that the PSC rule that Ameren Missouri is taking in more revenue than allowed in its current rate structure, and for the PSC to reduce the rates that Noranda now pays for Ameren's electricity.

"It's unique that it's coming from customers," said Morris Woodruff, the commission's secretary and chief regulatory law judge, noting that utilities in the past - including Ameren - have asked for interim rate relief before filing a new rate request.

Under state law, when a regulated utility asks for a change in its rates, the PSC can take up to 11 months to decide the issue.

But no law controls a customer's request for a change in rates because, Woodruff noted, "They couldn't create a rate case."

Complicating the issue is Ameren's 60-day notice that it intends to ask the PSC in July to approve a new rate schedule.

Woodruff suggested the commissioners start looking at Noranda's two issues as an "interim rate review, (eventually) rolling them into the rate cases while having an expedited schedule" as Noranda requested.

"The idea would be that we would integrate the complaints into the general rate case, get the (PSC) staff started on their audit review - and, at some point earlier in the process, we would have a hearing about whether there should be interim rate relief."

Ameren has proposed that the PSC dismiss both Noranda complaints.

Missouri's largest electricity provider's current rates went into effect in January 2013, and the lowest per-kilowatt-hour rate on that schedule has only one customer - Noranda's aluminum smelter near New Madrid in the Bootheel - because that industrial plant consumes more power than any other Ameren customer.

In a filing, Noranda said its business has hit a rocky patch, and that it may have to close the Missouri smelter at a cost of 900 jobs if the commission doesn't cut its rate from $37 for each megawatt-hour to $30.

In its request, Noranda noted it pays Ameren about more than $160 million each year for their electricity, and cutting its rate would save the aluminum operations about $30 million a year.

Some opponents are urging the PSC to ignore what they call Noranda's "rate-shift" proposal.

Chairman Robert Kenney noted another issue for the commission is a potential legal headache, because the burdens of proof the PSC requires are different for Noranda's requests, compared with a full-blown rate case when a utility wants to change its rate structure.

Commissioners asked the parties to comment before setting a schedule for filing documents and holding hearings.

Correction: Some consumer groups, including the AARP, have joined with Noranda Aluminum in asking the Public Service Commission to determine if Ameren Missouri has been "overearning" - taking in more money than the rates it was authorized to charge were supposed to bring in, when the rates went into effect January 2013. Information about the parties making the requests was incomplete in the article above.