Taum Sauk manager says he felt pressure to increase productivity

Thursday, August 2, 2007

JEFFERSON CITY, Mo. (AP) A former manager of the Taum Sauk hydroelectric plant told the Missouri Public Service Commission Thursday that Ameren Corp.'s energy trading unit asked him in 2000 to run the reservoir outside of what he considered safe operating limits, soon after industry deregulation allowed the company to sell more power on the open market.

David Fitzgerald told the PSC that he sent an e-mail to Ameren managers and employees in May 2000 reminding them of Taum Sauk's safety protocols. He said in the e-mail he felt pressure to skirt those protocols to generate as much electricity as possible.

"We had a larger market that was available for us to sell energy into," Fitzgerald said during testimony at a PSC hearing into the Taum Sauk reservoir collapse.

Fitzgerald said Ameren's newly created energy trading unit was staffed by employees with a background in commodities trading instead of power plant operations.

"There was some lack of knowledge and understanding about the Taum Sauk plant," he said. "It was my obligation to clarify what the constraints on the plant were."

The commission heard testimony last week from an Ameren engineer who said the company's energy trading unit repeatedly denied his requests to shut down the plant for critical repairs just months before it collapsed in December 2005.

The resulting flood devastated Johnson's Shut-Ins State Park and injured a family of five.

The Environmental Protection Agency has begun a criminal investigation into Ameren's conduct at the reservoir before the collapse. Attorney General Jay Nixon said he will not file criminal charges in the case, though he is suing the utility company.

PSC Commissioner Steve Gaw said the state utility regulator is investigating the accident to see if it reveals any companywide safety problems at Ameren.

The publicly traded company operates power plants in Missouri and Illinois. Its Missouri division, called AmerenUE, is regulated while its Illinois division is unregulated. If AmerenUE generates power beyond what Missouri customers need, it is allowed to sell the electricity on the open market.

Fitzgerald said when he assumed control of the Taum Sauk plant in 1999, it was used as an emergency backup facility that only delivered power when demand was high.

But he said power generation increased significantly at Taum Sauk before he left the plant in 2002 to take a job at Ameren headquarters. Production increased because Ameren had more customers during that time; deregulation allowed more sales on the open market; and the reservoir became more efficient at producing energy, Fitzgerald said.

The hydroelectric plant had two reservoirs -- one in a valley and the other on top of Proffit Mountain. Turbine engines automatically pumped water from the valley into the upper reservoir at night when power was cheap. When demand was high, water was released back into the lower reservoir to generate power.

Fitzgerald said Ameren's energy traders asked him two or three times to generate power when he considered it outside the proper protocol. Specifically, they asked to drain the upper reservoir at a rate that would have sent too much water into the lower valley. That could have posed a danger to downriver towns like Lesterville.

Fitzgerald said he refused each request. After he sent the 2000 e-mail, he took Ameren energy traders on a tour of the reservoir to educate them about its operation.

"We need their expertise; they need my expertise," Fitzgerald said of the energy traders.

After the tour, Fitzgerald said he didn't get any more requests to run the plant in what he considered an unsafe manner.

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