AmerenUE says plan would save its customers millions

ST. LOUIS -- AmerenUE said its 1.2 million Missouri electric customers could get at least $120 million in rate cuts and other benefits under a three-year plan it has filed with state regulators who have accused the company of overcharging.

Under the plan filed with the Missouri Public Service Commission, St. Louis-based AmerenUE said the benefits -- partly driven by the utility's financial performance -- also would include customer credits, funding for aid to low-income customers and "economic development initiatives."

Missouri utility regulators have sought to reduce AmerenUE's annual electric revenues on grounds that the state's largest electric utility has been earning too much at its customers' expense.

In March, PSC staff said calculations show that AmerenUE earned $246 million to $285 million more than it should have under the allowed rate of return on equity using a base year that ended last June 30. Those calculations were tens of millions of dollars more than first suggested.

Messages left with the PSC were not immediately returned.

In pitching its new proposal covering July 1 of this year through June 2005, Ameren said "drastic rate reductions" sought by the PSC "would cripple our ability to make these critical investments and put Missouri's energy future at risk."

"We face the need to invest up to $3 billion over the next five years in our energy infrastructure simply to meet our customers' growing power demands and to provide reliable, high-quality service," said Charles Mueller, chairman and chief executive of Ameren Corp., AmerenUE's parent. "This plan would allow us to make these much-needed investments in a timely fashion."

Sharing earnings

AmerenUE would share earnings over certain return-on-equity thresholds, immediately award $15 million in credits to bills, and permanently cut an annualized $15 million in rates for retail electric customers retroactive to April.

The proposal also calls for AmerenUE to commit $1.5 billion to $1.75 billion for "needed energy infrastructure investments through June 2005, and for immediate funding of $5 million for a program to help low-income customers pay for their energy costs. AmerenUE also would shell out $5 million to fund an economic-development program.

The PSC shut down AmerenUE's experimental rate plan last year after six years.