WHAT OTHERS SAY: Ameren rates are likely to go up

Tuesday, May 20, 2014 | 11:02 a.m. CDT; updated 6:25 a.m. CDT, Wednesday, May 21, 2014

The price you pay for electricity is going to increase. At least that's if Ameren Missouri has anything to say about it.

The utility announced it will seek another rate hike this July. That is in addition to a request it has already filed with the Public Service Commission for a monthly fuel adjustment surcharge increase of 66 cents.

It hasn't disclosed the exact amount of the rate increase yet, but company officials are making the case for more revenue in a more aggressive public relations campaign than we've seen in a while.

Ameren lobbyists and PR specialists are reaching out to media outlets, Chambers of Commerce and service clubs across Missouri to explain why they need more revenue. They are pressing the flesh and telling their story to anyone who will give them an audience. The once quiet utility is now speaking louder.

It's not an easy sell. Who wants to pay higher utility bills?

Plus, if granted, it would mark the sixth time Ameren was allowed a rate hike since 2007. The most recent was a $263 million rate increase that the PSC approved in December of 2012, which went into effect in January of last year. Since 2007, the utility's rates have risen by hundreds of millions of dollars.

Moreover, the effort to seek yet another rate hike comes after Ameren posted profits of $47 million in the first quarter of this year compared to first quarter earnings of $40 million in 2013.

If profits are surging, why the need for more money?

Ameren officials say they need more revenue to reinvest in an aging power infrastructure that is outdated and increasingly inefficient. They need a modern power grid if they are going to remain compliant with EPA regulations.

In the past, they point out, our state's growth rate provided the incremental revenue necessary to keep up with upgrades to the power infrastructure. That growth isn't there anymore.

Ameren officials compare it to the problem with our state's transportation infrastructure. You can only wait so long before roads and bridges have to be replaced.

They say they have a tougher argument when it comes to upgrades to the power grid because it is largely unseen to the general public. It may be out of sight for the public, but it is a different ballgame when you are the entity responsible for keeping the lights on.

Ameren executives said that they spent $600 million last year on upgrading infrastructure but that it's not enough.

They have invested heavily to improve reliability of the local electric grid while cutting power plant pollution. Officials say they have cut corporate expenses and are aggressively trimming costs wherever they can.

But they argue there is another $1 billion that needs to be invested in its transmission and distribution infrastructure across the state which is not reflected in current rates. Like our state's transportation infrastructure problem, the problem is substantial and cannot be fully resolved with existing revenue streams.

They also point out that its first quarter profits are a result of the unusually harsh winter, which drove higher electric and natural gas sales volumes.

Ameren officials acknowledge that any time rates are raised it creates a hardship on consumers, especially on lower income consumers.

But they argue that even with the proposed increase, Ameren's rates would be 24 percent below the national average and cheapest among investor-owned utilities in the state.

That's a persuasive argument for any company to make, even if we don't care to hear it.

Our guess is that our electric rates are headed higher.

Copyright Washington Missourian. Distributed by the Associated Press.

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