The utility filed its request Friday with the Missouri Public Service Commission. If approved, it will mean an 11 percent increase for customers across all rate classes, the company said. … The request comes on the heels of a $226 million rate increase — a 10 percent hike — that took effect in June. And in late July,… AmerenUE put in another request to collect an additional $71 million from customers for fuel-related expenses, which is still pending.

Posted on Sep 04, 2010 in News

AmerenUE to seek $263 million electric rate hike

BY KAVITA KUMAR

AmerenUE is asking for another rate hike — this time for $263 million a year. Most of the money would cover the costs of investments that the utility is making to improve the reliability of the electric grid and reduce pollution.

The utility filed its request Friday with the Missouri Public Service Commission. If approved, it will mean an 11 percent increase for customers across all rate classes, the company said. Average residential electric bills would increase about $9.30 a month.

The request comes on the heels of a $226 million rate increase — a 10 percent hike — that took effect in June. And in late July, AmerenUE put in another request to collect an additional $71 million from customers for fuel-related expenses, which is still pending.

Lewis Mills Jr., the state’s public counsel and main consumer advocate, noted that AmerenUE was asking for an “awful lot of money” after a number of rate increases in the last few years.

“Another 11 percent — that’s another straw on the camel’s back,” he said. “Have the people in St. Louis brace for it. Here comes another rate increase.”

While the PSC usually does not approve AmerenUE’s full requests, it usually grants part of them, he added. For example, AmerenUE had initially sought a $402 million increase for its latest rate hike, but the PSC ended up approving a $226 million increase.

The latest rate hike request will cover $1 billion the utility plans to have spent on improvements through February 2011, company officials said.

The bulk of the proposed rate increase would go toward the cost of installing two scrubbers at the company’s Sioux coal-fired plant in St. Charles. The scrubbers will provide cleaner air by eliminating all of the sulfur dioxide emissions from the plant, the company said.

About $110 million of the $263 million request would go toward the $600 million project, which began in 2006 and should be completed by the end of this year, the company said.

About $70 million of the increase would help cover higher coal prices and increased costs to transport coal to the plants.

And about $15 million would go toward improvements at the Taum Sauk Power Plant. A settlement with the state of Missouri prohibits AmerenUE from passing on to customers the costs to rebuild the reservoir, which ruptured more than four years ago.

Instead, AmerenUE said the requested funds would go toward changes that would have been necessary absent the breach, such as a new instrumentation and controls system, an overflow release structure and more robust construction to comply with more stringent earthquake standards.

The rest of the project list includes a host of smaller tasks that range from fixing transformers in neighborhoods to buying new equipment, said Steve Kidwell, AmerenUE’s vice president of legislative and regulatory affairs.

“We know that it’s a hardship,” Kidwell said of the proposed increase. “We don’t like having to ask for this. … We’re doing our best to cut costs.”

The company, a unit of St. Louis-based Ameren Corp., has frozen management salaries, laid off employees, and taken other steps to better manage its money, he said. Last year, the company eliminated 300 positions — both through layoffs and through a voluntary separation program. That represented a 3 percent reduction of the corporation’s 9,700 employees.

And AmerenUE recently announced a $5 million energy assistance program, funded by Ameren shareholders, to help customers most in need.

But consumer advocates are not placated.

“We’re pretty outraged,” said Joan Suarez, president of the Consumers Council of Missouri. “This is another double-digit increase on top of the one they just got.”

By law, the PSC has 11 months to consider AmerenUE’s request.

And it usually takes all of that time, Mills said. So it’s fair to conclude that the rate increase, if approved, won’t take effect until the end of next summer, he said.

“But it will catch some of the hot weather,” he added.

On top of this rate increase, he noted that other utility companies also have been raising their rates.

Missouri American Water Co. raised rates almost 15 percent, or about $4 per month, beginning July 1. And this month, Laclede Gas Co. boosted its rates by 2.5 percent.

AmerenUE has had three rate increases in the last three years. In addition to the 10 percent increase in June, there was an 8.1 percent increase in 2009 and a 3.3 percent increase in 2007.

AmerenUE, which is Missouri’s largest utility, will change its name on Oct. 1 to Ameren Missouri.

http://www.stltoday.com/business/article_f7a56862-4dff-56f3-ba0b-9aded6698f03.html