Electric rates

My question to Ameren/UE is how much of this rate increase is due to the impending cap and trade legislation?

Not sure if Cap and Trade will pass, but let us all remember what voters passed in November 2008.

Proposition C

Shall Missouri law be amended to require investor-owned electric utilities to generate or purchase electricity from renewable energy sources such as solar, wind, biomass and hydropower with the renewable energy sources equaling at least 2% of retail sales by 2011 increasing incrementally to at least 15% by 2021, including at least 2% from solar energy; and restricting to no more than 1% any rate increase to consumers for this renewable energy?

The estimated direct cost to state governmental entities is $395,183. It is estimated there are no direct costs or savings to local governmental entities. However, indirect costs may be incurred by state and local governmental entities if the proposal results in increased electricity retail rates.

If the 18% increase results in a 50-cent higher average bill, then the average bill is $2.78.

I DON'T THINK SO!

Lets face it, if your a big Utility Co you can pretty much do as you please about scr*wing your customers over and as much as you want!

Suggest that none of the rate increase request is directly due to potential cap-n-trade legislation.

However, there may be indirect effects due to the uncertainties around carbon tariffs which may affect the choice of fuel for any new power plant that may be built. From Ameren's annual report - http://library.corporate-ir.net/library/91/918/91845/items/328768/504F8548-9258-... - AmerenUE listed a fuel cost of $1.426 per million BTU for coal, $0.493 per million BTU for nuclear, and $10.264 per million BTU for natural gas. Fuel accounts for about 65-75% of the total cost of generation. Since coal and nuclear are on the 'outs' because of various environmental and construction cost reasons - one can guess what will happen to rates when a bunch of natural gas-fueled power plants are built to meet growing demand.

From http://www.ameren.com/UEPrice/ - "The request means an average (1,100 kilowatthours per month) household bill will increase by less than 50 cents per day beginning in June 2010." Fifty cents per day comes out to $15.00 in a 30-day billing period, suggesting an average monthly electric cost of $15.00 / 0.18 = $83.33 - PLUS the $7.25 customer charge with the 8.25% sales tax piled on top of it all for a total current average expected electric bill of $98.06 - or about $1200 per year.

Those with AmerenUE natural gas service will likely have a lower average electric bill, offset by the $15.00 customer charge and usage charges for gas.

The 'greenies' should be overjoyed with this rate increase proposal - with the way Proposition C is written, the higher the cost of conventional power, the more attractive renewable power becomes as the gap between the costs of generation between the two sources narrows, and the more that can be charged for renewable power sales - encouraging more construction of renewable generation that becomes more financially viable and less dependent on subsidies, and reducing the 'out' for compliance based on cost of construction.

The ball is in the PSC's court to ensure that the rate increase is justified.

Suggest that one of the best ways to mitigate the effects of any rate increases is to figure out how to use less!

Here is a table of the national average prices of electricity since 1960 - keeping in mind that Ameren's current 4-month summer rate is 8.63 cents per kilowatt-hour and current 8-month base winter rate is 6.12 cents per kilowatt-hour. Note how the prices were fairly flat between 1980 and 2000, but have really started to take off in the last 10 years or so.

http://www.eia.doe.gov/emeu/aer/pdf/pages/sec8_39.pdf

http://www.eia.doe.gov/emeu/aer/pdf/pages/sec8_38.pdf