AmerenUE to seek 12.1 percent rate increase

AmerenUE will seek a 12.1 percent increase in electric rates from the Missouri Public Service Commission, the company announced today.

The rate increase will help support continuing efforts to make electric service more reliable as well as add cash to the company's bottom line to make the utility more attractive to investors, vice president for energy delivery Ronald Zdellar told the Southeast Missourian.

The company will also be asking for the ability to adjust rates as fuel costs rise without going through a full rate increase review process.

The PSC approved a rate increase of approximately 2 percent in July, the result of a request filed in 2006 for increases of 10 percent for residential customers, 23 percent for commercial customers and 29 percent for industrial users. The latest request, which will take about 11 months to be heard by the PSC, is an across-the-board hike, Zdellar said.

Under the conditions approved last year, AmerenUE is allowed a return of 10.2 percent on its regulated Missouri operations. AmerenUE is asking for that allowed rate of return to be increased to 10.9 percent. Since the rate hike took effect, Zdellar said, Ameren has recorded a return of 9 percent and expects that to fall to 8 percent.

The company's bottom line is being squeezed by cost increases that have included a 33 percent increase in the cost of coal, a 70 percent increase in the price of electrical transformers, a doubling of copper wire prices and a 40 percent increase in the cost of power poles, Zdellar said,

If approved, the rate increase would add approximately $9 per month to the average electrical bill, the company said in a news release.

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