Area company to testify on Ameren rates

Concrete giant Buzzi Unicem USA, formerly Lone Star Industries, has petitioned to intervene and submit testimony in the upcoming case concerning AmerenUE's requested electric rate increase.

Buzzi's plant at 2524 S. Sprigg St. is the largest consumer of electricity in Cape Girardeau, using up to 18,000 kilowatt-hours per month. Buzzi, an Italian-owned company, employs approximately 175 people locally and has one other Missouri plant in Festus.

On July 7, Ameren asked the Public Services Commission, the state oversight body, to raise electric bills by an average 17.7 percent, allowing the utility company to generate an additional $361 million yearly.

The proposed rate increase is tiered: Residential rates would rise less than 10 percent, commercial customers would pay 23 percent more and large industrial customers 29 percent more.

The average customer with a monthly bill of $66 would see it raised by $6 under the proposal.

At the time of the announcement, Buzzi plant manager Steve Leus called the proposed increase "unbelievable" and said it could raise the plant's electric bill during peak months by as much as $240,000.

The hearings will occur in March in Jefferson City. Parties with "an interest in the case different than that of the general public" may petition to intervene, said PSC spokesman Kevin Kelly. He said these parties are typically large users of electricity.

Those seeking to intervene must apply by July 31.

Buzzi is asking to intervene as a part of the Missouri Energy Group, an ad hoc group of major energy consumers that includes Barnes-Jewish Hospital in St. Louis and cement supplier Holcim U.S., which has five offices in the state.

"They share a desire for rates that are fair and reasonable," said Lisa Langeneckert, attorney for the energy group. "Ameren needs to have a fair amount of return on their equity, but these parties want to make sure they're not subsidizing anyone else. Ameren has filed a rate design structure that puts a cap on residential customers at 10 percent and any amount normally paid beyond 10 percent will be shifted to large commercial or large primary customers. The shifting of costs from one class to another is generally not done in Missouri, and it's not a good precedent to set."

Ameren says it seeks to balance the effect of any rate increase.

"AmerenUE truly believes that rate stability for residential customers is an important goal. In making the decision we took into account that the ability of residential customers to react to rate increases may be limited compared with industrial or retail customers," said Ameren spokeswoman Erica Abbett.

The state of Missouri has filed to intervene under the direction of Attorney General Jay Nixon, who wrote that the proposed rate increases will "have a substantial impact on the state's budget." Nixon spokesman John Fougere said the preliminary indications show the increase would cost the state "tens of millions of dollars."

Also filing to intervene is New Madrid-based smelter Noranda Aluminum Inc. The company employs 1,100 workers and is the largest industrial consumer of electricity from AmerenUE, according to its filing.

Noranda's statement said that "as a matter of principal and because of competitive business operations, Noranda must oppose rates that are purposely set above Noranda's cost of service."

tgreaney@semissourian.com

335-6611, extension 245