Ameren execs tell regulators utility should increase maintenance

Monday, December 18, 2006

ST. LOUIS -- Ameren Corp. customers in Missouri and Illinois have gotten used to a vicious cycle.

First, a major storm knocks out power to thousands of homes and businesses. Then Ameren blames nature. State regulators promise a thorough investigation, but soon enough another calamitous storm leaves customers in the dark.

A St. Louis Post-Dispatch investigation has found that Ameren executives often insist publicly they've done all they can to limit storm outages, but tell regulators in writing that they must spend more money on programs to boost reliability.

At the same time, Ameren relies on tree trimmers to inspect the vast majority of the power grid even though the trimmers' union says they're not trained to spot many problems.

Regulations can be lax. Neither Missouri nor Illinois have hired outside engineers to investigate the outages.

Ameren's most recent outage happened after an ice storm swept through parts of Illinois and Missouri Nov. 30, knocking out power to more than 500,000 Ameren customers. Just less than four months earlier, windstorms knocked out power to more than 600,000 Ameren customers. In both cases, it took up to a week to restore power to many customers.

Missouri Gov. Matt Blunt and Illinois Lt. Gov. Pat Quinn have both called for investigations.

Customers are increasingly complaining that Ameren is shortchanging maintenance.

Ameren executives note that other utilities suffer major outages after storms such as the 1 million left without power Friday in Washington state.

Ameren's tree-trimming program has taken much of the criticism after the storms.

In July, Ameren chief executive Gary Rainwater said it was "simply wrong" to think trimming reduces outages from severe storms.

"It isn't like, well, it would make a little difference if you trimmed the trees a little better," he said. "It makes no difference at all. No difference whatsoever."

Yet in September, the utility's vice president of energy delivery-distribution, Ron Zdellar, told the Missouri Public Service Commission that Ameren might boost its tree-trimming program by 50 percent. He said the spending increase would specifically reduce storm damage.

"I would expect the scope of outages to be reduced, and restoration times should also be improved," he testified.

Ameren is trying to persuade the PSC to boost electric rates, which have fallen 13 percent since the last increase in 1987. To get rates increased, Ameren must convince the regulators it needs the cash for good reason.

Officials at Ameren's St. Louis tree trimmers' union complain that their members aren't properly trained to inspect lines and keep up with trimming.

Ameren said the program worked fine.

"We think it's a very effective program, because they [tree trimmers] are there on a regular basis, and they find things that do need to be corrected," said Tom Voss, Ameren's executive vice president and chief operating officer.

In regulatory filings in Missouri two weeks before the summer storms, Ameren's senior vice president of Missouri energy delivery, Richard Mark, said the utility needed to boost spending on pole inspections.

"By replacing poles prior to failure, AmerenUE expects to avoid outages, reduce the scale of outages which do occur and reduce restoration time of those outages," Mark testified to the PSC in July.

Mark insisted later that doesn't mean the current inspection regimen is inadequate. Increasing spending would just improve the program, he said.

"To do that, we have to implement new programs that are going to take us to a better level of reliability," he said.

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