CEO defends Ameren at Taum Sauk hearing

Thursday, August 16, 2007

JEFFERSON CITY, Mo. (AP) -- AmerenUE Chief Executive Officer Tom Voss told the Missouri Public Service Commission Thursday that the utility has launched new safety programs since the Taum Sauk reservoir collapse, but has not changed a bonus system that critics say favors keeping plants running over closing them for safety concerns.

Voss testified during a PSC hearing into the December 2005 collapse that spilled 1.3 billion gallons of water in southeast Missouri's Reynolds County, badly damaging Johnson's Shut-Ins State Park and injuring the park superintendent, his wife and three children.

Voss said the company has emphasized to plant managers that they make the ultimate call whether to shut a plant down for repairs.

"We have good people that we put in place, and layers of management to make those kinds of decisions," he said.

Ameren's bonus policy has been the focus of much questioning during the hearings that began last month. The PSC is examining whether safety lapses at Taum Sauk point to companywide problems at Ameren Corp., the parent company of the Missouri division called AmerenUE.

Ameren executives have said previously the bonus system played no role in managers' decision to keep the hydroelectric plant running. But PSC commissioner Steve Gaw said Thursday he was concerned that Ameren has not changed its bonus policy.

"There's an overriding incentive to keep plants running," Gaw said during an intermission in the hearing. "I still haven't heard that there's an equally strong incentive that ensures the safety of the plant."

At issue is an incentive system for Ameren managers that pays out annual bonuses based on measures called Key Performance Indicators, or KPIs.

The policy pays out 60 percent of annual operating bonuses for generating profits, meeting budget and keeping plants open. Twenty percent is given for safety issues like avoiding lost-time accidents. The remaining 20 percent is tied to pollution control.

Voss said Ameren studied what went wrong at Taum Sauk, and concluded that a combination of poor design and human error led to the collapse. He said the company formed a dam safety group to ensure there is more peer review of design and maintenance decisions at hydroelectric plants.

Ameren has also drawn up a new set of safety guidelines that managers are required to read and that are posted at all of its power plants, Voss said.

Attorney General Jay Nixon is suing Ameren over the collapse. He said in May he would not file criminal charges in the matter because a Missouri State Highway Patrol report did not find a suspect in the case.

Gov. Matt Blunt, speaking Thursday at the Missouri State Fair, said the PSC investigation has "demonstrated the very insufficient nature of the criminal investigation" conducted by the patrol and Nixon's office. Nixon spokesman Scott Holste did not return a message seeking comment.

While fellow commissioners were questioning Voss in Jefferson City, commissioner Lin Appling was at the State Fair in Sedalia shaking hands at the annual political ham breakfast.

"Ameren has had a tough two years, but we don't want to drive these guys into the ground," Appling said in an interview at the fair. "I think it's getting a little bit tiring and hopefully Friday we can bring this thing to a wrap and do some other things."

Appling said that although he was not present to question Voss in the morning, he was heading back to Jefferson City later in the day and planned to read transcripts of the hearing.

Appling said he had appeared at the last 10 ham breakfasts and didn't want to miss it.

The only PSC member who has consistently been at the three weeks of hearings is Gaw, who has peppered each of the Ameren witnesses with very detailed questions about the events leading up to the reservoir collapse.

Associated Press Reporter David Lieb in Sedalia contributed to this report.

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