Utility commission rejects Ameren, Noranda requests

Thursday, February 19, 2009

Higher electric rates for AmerenUE customers became a certainty Thursday when the Missouri Public Service Commission denied several requests to take another look at its recent order allowing the utility to charge 8.1 percent more for power.

On a 5-0 vote, the commission rejected Ameren's request to rewrite a portion of the rate case related to the division of profits from unregulated wholesale power sales. The utility company wanted to change the rules because it will have up to 3.2 million megawatts of power to dispose because the late January ice storm halted most production at Noranda Aluminum in New Madrid, Mo.

"If the commission were to grant AmerenUE's application for rehearing it would have to set aside the approved stipulation and agreement regarding the fuel adjustment clause, reopen the record to take evidence on the appropriateness of the proposed change and make a decision before the March 1, 2009 operation of law date. Such action is obviously impossible," the commission wrote in its order denying Ameren's request.

In split votes of 3-2, the commission also declined requests from Noranda, AARP and the Office of Public Counsel to reconsider the rate increase.

Noranda, the company's biggest customer, had sought to block the rate increase because of the economic impact on the aluminum maker, which has laid off more than 200 workers at the New Madrid plant since late last year.

The Office of Public Counsel, the taxpayer-funded consumer advocate on utility cases, had argued for a smaller rate increase.

"Noranda, Public Counsel and AARP have not shown sufficient reason to rehear the report and order," the commission wrote in the order turning down the request.

On Jan. 27, the commission granted a rate increase that will cost ratepayers about $162 million, with the average home user spending about $70 more each year for electricity. The rate increase will take effect March 1. Company officials have told investment analysts that another request for a rate increase is likely later this year.

The commission's actions end its involvement in the case. But Public Counsel Lewis Mills said he expects to file a request for a court review.

"I am not surprised the commission voted the way they did," Mills said. "The administrative process is done, and it clears our way to appeal it to the courts."

Noranda is "disappointed with the fact that a request for rehearing was denied," said Keith Gregston, president and general manager of the New Madrid plant. He noted the commission agreed with Noranda that Ameren did not deserve another chance to plead for higher rates. He declined to say whether Noranda would pursue a court case to challenge the increase.

AmerenUE did not return a call seeking comment.

rkeller@semissourian.com

388-3642

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