JEFFERSON CITY, Mo. – Ameren UE filed a rate case Friday with the Missouri Public Service Commission (PSC) asking for a $206 million rate increase. The company proposes that $74 million would go to improving electric infrastructure while $51 million would offset the loss of Noranda sales. Another $34 million would go towards increased transmission costs.
Noranda declared bankruptcy this past February. Afterwards, Noranda and Ameren, once at odds regarding rates, came together to support a grid modernization bill, which ultimately was not passed out of the legislature. Noranda had its first round of layoffs in November 2014, laying off 530 more workers in January 2016 after 2 of 3 pot lines went down. The third line was discontinued in March 2016.
Noranda was not only one of southeast Missouri’s largest employers, but was Ameren’s largest customer. The loss of Noranda dropped Ameren’s revenue over $50 million in a time when Ameren is aggressively seeking grid modernization.
Other drivers in the request include reduced customer sales volumes, increased transmission expenses, changes to tracted pension and solar rebate expenses, increased net energy costs, increased income taxes, amortization of fixed cost loss, and general expense increases.
Ameren will continue its fuel adjustment clause, post-employment benefits, and cost tracking mechanisms.
The utility expects the PSC to make a decision in April, 2017 with the rate increases taking effect in late May that year. The Office of Public Council (OPC) applauded Ameren for not seeking an expedited process, allowing a full vetting of the rate case.
“This will also give us a chance to work with Ameren on issues that we do believe benefit the public at large,” said OPC Acting Director James Owen.
The OPC expressed skepticism last week about Ameren’s proposed rate increase, while cautioning that it still had to review the entire rate case.
The office’s statement specifically singled out concern over a proposed 7.8 percent rate increase, saying residential customers would carry a heavier increase at 8.29 percent.
Owen says OPC will also scrutinize other aspects of the rate case, including “a number of newly proposed regulatory rate mechanisms that do not appear to be in the public interest.”
The OPC will also take a look at the customer service charge, which they say will increase 61 percent due to a new “system access charge.” The current customer charge is $8.00 and with the system access charge, customers would have to pay $12.89 a month.