The Missouri Public Service Commission has voted to grant an electric rate increase of approximately $172 million to Ameren Missouri, approximately $91 million less than what the company requested in its September 2010 filing.
The rate increase reflects Ameren’s increase in costs to provide service to its customers.
PSC staff estimates that the impact on the typical residential customer will be approximately $8 a month. It is expected that new rates will take effect in August.
The commission’s vote was unanimous, 5-0.
In its decision, the commission denied Ameren’s request to include any of the cost to rebuild the upper reservoir of the Taum Sauk plant to rate base. Ameren sought to add approximately $89 million to rate base.
After the December 2005 Taum Sauk incident, Ameren took full responsibility and promised to protect its ratepayers from the consequence of that collapse.
“The commission intends to hold Ameren Missouri to that promise,” the commission stated.
As part of its decision, the commission set Ameren ‘s return on equity (ROE), or profit margin, at 10.2 percent. In this rate case, Ameren sought an ROE of 10.7 percent.
When Ameren filed its rate request with the Public Service Commission on Sept. 3, it sought to increase annual electric operating revenues by approximately $263 million. The company cited costs associated with energy infrastructure investments, higher fuel costs for its power plants — such as coal and transportation of coal to its power plants — and the installation of two scrubbers at its Sioux Power Plant as major reasons for seeking a rate increase.
The Sioux Power Plant scrubbers are designed to remove in excess of 95 percent of the sulfur dioxide gas generated by the plant as well as removing oxidized mercury, sulfur trioxide, particulate, hydrogen chloride and hydrogen fluoride. Ameren installed the scrubbers at the plant to comply with various federal clean air rules.
Ameren attributed roughly $200 million of the proposed increase to energy infrastructure investments, environmental controls and other reliability costs to meet customer expectations for more reliable and cleaner energy.
In its order deciding the rate case, the commission accepted a joint position by several parties in the rate case which will continue current funding levels on Ameren’s low-income weatherization programs. The commission’s order also encourages Ameren to continue to provide energy efficiency programs.
Ameren provides electric service to approximately 1.2 million electric customers in Missouri.