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Partisans ramp up battle between Ameren, Noranda

Partisans ramp up battle between Ameren, Noranda

June 8th, 2014 in News

For the past week, competing supporters of Ameren Missouri and Noranda Aluminum have ramped up their publicity effort to encourage state residents to take their side.

The Missouri Public Service Commission will hold a public hearing Wednesday on two cases involving Ameren Missouri, the state's largest regulated utility, and Noranda Aluminum, Ameren's single largest customer.

"MBEF is reminding Missouri consumers of reasons to oppose Noranda's rate shift request as the PSC plans to hear from community members in Caruthersville, St. Louis, and Jefferson City," a Friday news release from the group Missourians for a Balanced Energy Future said.

MBEF supports Ameren. It issued news releases each day last week, pointing to various problems it sees the "rate-shift" causing for other Ameren customers.

Its releases only commented on Noranda's request for the PSC to change Ameren's rate structure.

The group Fair Energy Rate Action Fund (FERAF) issued its own release Friday, urging consumers to attend one of the PSC's three hearings this week - including Wednesday's hearing - to give their testimony on a complaint that Ameren Missouri has overearned more than $100 million from its customers the past two years.

FERAF's members include Noranda.

Its release didn't mention Noranda's rate-change request.

Noranda is a Tennessee-based company that operates an aluminum smelter near New Madrid.

The smelting process, converting aluminum oxide to molten metal, requires a steady stream of electricity, making Noranda Ameren's single largest customer - using about 10 percent of all the power Ameren provides to more than 1 million business and residential customers.

Because it is a high-demand customer and its delivery system is not as complicated as providing electricity to individual homes, the PSC has placed Noranda in a separate rate class. The company

Noranda currently is the only customer in that rate class, and pays a lower rate for electricity than other customer classes.

Almost four months ago, Noranda and some other customers filed two, separate issues for the commission to consider:

• Accusing Ameren of earning more income than allowed by the "return on equity" the commission approved in Ameren's last two rate cases. In its filing, Noranda asked the PSC to modify Ameren's current rates so they would be more "just and reasonable."

• Asking the commission to change Ameren's current rate structure so that Noranda's rates would be reduced to $30 for each megawatt hour consumed, limiting any future increases to just 2 percent and protecting Noranda's rates from the fluctuations caused by changes in the price Ameren pays for the fuel it uses to generate electricity.

The latter request also proposes the changes be "revenue neutral" for Ameren - that its total income would be the same - and opponents say that means other customers would have to pay between $500 million and $1 billion in higher rates.

Noranda's filing said the rate-change is needed because the current economy in the aluminum business is down - and failure to change the rates would keep Noranda at a disadvantage with the eight other smelters (operated by other companies) in the nation, forcing it to consider closing the Bootheel plant and ending jobs for nearly 900 employees.

The PSC has scheduled two formal hearings on the two requests - June 16-17 for the rate change request, with a final PSC decision expected in early August, and July 28-Aug. 1, with a decision expected in late-September.

But this week's public hearings are intended to take public comments on both issues.

The hearings begin at 6 with a PSC staff member explaining the two cases and answering questions from those who attend, followed by taking "sworn testimony" from anyone wishing to comment on either, or both, cases.

The testimony then will be included in the materials the five-member commission considers in reaching its final decisions.

Interested in attending?

The PSC hearings in Jefferson City will be held at 6 p.m. Wednesday in Room 410 of the Governor Office Building, 200 Madison St.