Ameren seeks flexibility in utility rates

Tuesday, February 10, 2009 | 10:34 p.m. CST; updated 11:02 a.m. CST, Wednesday, February 3, 2010

JEFFERSON CITY – The CEO of AmerenUE warned legislators Tuesday that the company will walk away from a second Callaway plant if Missouri does not ease restrictions on its utility rates.

While Ameren supports a bill, sponsored by Sen. Delbert Scott, R-Lowry City, that would allow them to recuperate the financial costs incurred, some of its largest consumers — including its single-largest consumer, Noranda Aluminum — voiced their opposition during a Senate commerce committee hearing.

"We need rate relief, not rate increases," said Kip Smith, the president and CEO of Noranda, which dedicates one-third of its budget to energy expenses.

Sen. Kurt Schaeffer, R-Columbia, was among those who expressed their support for the Callaway 2 project. 

"I think this could be the cornerstone of energy independence in Missouri for the next 50 years," he said.

But he did express a variety of concerns over the bill, especially the lack of consumer protection clauses and the shortening of the period given to deem costs imprudent.

"There's basically no consumer protection in this bill at all for residential- or industrial-rate payers, and I think that's especially true if this plant is started and never finished," Schaeffer said.  "In fact, the language as I read it, if the plant is approved yet the project is abandoned, not only is there no mechanism to refund to rate payers the investment they've made, but you can actually continue to charge them the remainder of the project.  I just don't think that's fundamentally fair."

Any rate increases would still have to be approved by the Public Service Commission as they are now, but the bill would limit the period of time in which a review of a company's construction spending could take place.

This bill is "essentially a utility wish list," said Lewis Mills of the Public Counsel, which represents the interests of utility consumers in rate cases before the commission.

Ameren and Noranda representatives were among 35 witnesses to speak at the hearing.  Lager warned early on that the complexity of the issue may mean the issue won't be resolved during this legislative session.

"It's very reasonable to assume and understand that this is going to be a multiple-year process," said Sen. Brad Lager, R-Maryville.  "And I think that to believe that we're going to be able to do it all in one year is maybe wishful, at best."

According to the hourlong testimony of the AmerenUE delegation, the permit process may not be completed for three to four years, but they said their acquisition of federal loans requires the certainty the legislation would provide.


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