Ameren announces $180M settlement in Taum Sauk case

ST. LOUIS -- Ameren Corp. announced Wednesday that it had reached an agreement that will require the utility to pay $180 million in cash and property to compensate for damage resulting from the Taum Sauk reservoir collapse.

The settlement ends months of negotiations between the St. Louis-based company and three state agencies. The agreement will end a lawsuit filed by Attorney General Jay Nixon and settle all other state demands for compensation.

The mountaintop reservoir, part of a hydroelectric plant, collapsed Dec. 14, 2005, after Ameren delayed critical repairs there and faulty instruments caused the basin to overflow. The resulting flood devastated vast tracts of Johnson's Shut-Ins State Park and injured a family of five.

The bulk of the settlement cost -- some $103 million -- will go toward rebuilding the state park. Ameren also agreed to pay the Missouri Department of Natural Resources $18 million to extend the Katy Trail along 46 miles of the company's Rock Island Railroad.

While all of the parties have agreed to its terms, the settlement will not be official until a judge approves it after a 30-day period for public comment. The agreement was filed in Reynolds County Circuit Court, where Nixon's lawsuit is being heard.

All of the parties who signed the settlement praised it Wednesday morning as a fair compensation for the state and residents of rural Reynolds County, where the reservoir is. Ameren is rebuilding the plant, which is a pillar of the area's tax base.

"We think there's a fair balance there. We didn't get everything we want, but that's part of getting a settlement that is this extensive," said Department of Natural Resources director Doyle Childers.

Ameren chief operating officer Thomas Voss said ending the settlement talks will let Ameren focus on rebuilding the power plant, which he promised will be safer than the original structure built in the early 1960s.

The settlement deal requires Ameren to pay $56.2 million in cash, including $7 million for an economic development fund in Reynolds County. Many tourism-related businesses in the area were hurt after Johnson's Shut-Ins closed and popular canoeing riverways were muddied.

Ameren also agreed to pay more than $2.4 million through 2010 in Reynolds County taxes to keep the school district afloat until the new reservoir is completed. Voss said the new plant should be up and running by late 2009.

Ameren is required to spend $52 million to rebuild Johnson's Shut-Ins, while the settlement gives Ameren $51 million in "credit" for the cleanup work it has already performed.

Ameren has been in joint settlement talks with Nixon, the DNR and the Missouri Department of Conservation since at least this summer.

Reaching the settlement was a long and thorny process, as Ameren negotiated with state agencies that were often at odds with each other. At some points Ameren was working with one agency, only to be sued by another.

Last year, Childers refused to let Nixon represent the DNR after learning that Nixon accepted campaign contributions from Ameren after the reservoir collapse. The DNR offered it its own settlement proposal to Ameren in December 2006, only to have Nixon file his lawsuit days later.

Nixon's dispute with the DNR lasted until the final hours of the settlement talks. Childers said Nixon wouldn't sign the settlement until DNR dropped its legal motion to join his lawsuit, a move Childers said he agreed to only grudgingly on Tuesday.

By Wednesday both Nixon and Gov. Matt Blunt -- expected rivals in the 2008 gubernatorial race -- said they were satisfied with the final settlement.

"I am pleased that in addition to providing direct assistance to the citizens of Reynolds County, we have an agreement that includes rebuilding Johnson's Shut-Ins State Park and completing the Katy Trail from St. Louis to Kansas City which have been priorities for me," Blunt said in a statement.

Nixon said in a statement the settlement "satisfies my requirement for 'the three Rs,' which are the demands I have made from the beginning. Those are that Ameren's ratepayers be protected from bearing any of the costs related to the collapse, that the state of Missouri and other injured parties receive adequate recompense for their losses, and that Ameren must rebuild the Taum Sauk reservoir."