Electric customers could get credits under rule

JEFFERSON CITY, Mo. -- A divided state panel of utility regulators voted Thursday to move forward with a proposal that would require companies to credit electric customers whose power goes out regularly or for an extended time.

But the issue is far from resolved. The proposal still needs another round of approval, then undergoes a public comment period, and more changes are expected before the measure becomes final.

The Public Service Commission voted 3-2 to move forward with the proposed rule, aimed at measuring and improving electric companies' reliability. That rule calls for customer credits of at least $25 when it takes more than five days to restore power after a major storm or more than 16 hours in normal conditions.

The proposal also would set various reliability standards the four investor-owned utilities would have to meet, and companies are worried they may have to spend hundreds of millions of dollars to comply.

To alleviate some of those concerns, the commission removed one standard, meant to measure even the briefest flickers of lights. Utilities had cited that component in particular as driving much of the initial increased cost.

High costs for utilities

Investor-owned utilities cover about 63 percent of Missouri electric customers and are the only ones regulated by the Public Service Commission. Other people are generally served by electrical cooperatives or municipal utilities.

St. Louis-based Ameren Corp. estimated the revised rule would cost between $28.5 million and $33.5 million to make the required improvements, plus an additional $218.3 million annually to comply. The implementation cost is down significantly from Ameren's earlier estimate, but the yearly cost actually rose some.

To meet the requirement of tracking the average number of times annually that a customer experiences a momentary electricity outage, Ameren figured it would have to install about 8,000 automated data collection and transmission devices along its power lines and substations. That would have cost about $200 million.

Commission chairman Jeff Davis, who opposed the rule, said that if Ameren's annual cost is half of its current estimate, or $100 million, it would amount to an 8 percent rate increase, and customers should be aware that they'd pay for the reliability rule one way or another.

"We're creating unrealistic expectations about when people can get their service restored after a major outage," Davis said.

Meeting standards

A trade group for investor-owned utilities said Thursday it wants a fair system for all.

"A reliability standard is important," said Neal English, president of the Missouri Energy Development Association. "Sometimes we focus too much on the past. What we'd like to do is focus on the future and how we can make this something we can live with."

The rule also requires utilities to meet certain standards in keeping the lights on and proposes penalties if they fall short. Davis said if penalties are considered, incentives for those performing well also should be a factor.

Utilities also would submit an annual report detailing how often the power goes out and where they fall compared with national averages. The proposal calls on utilities to be in the top 25 percent nationally of reliable service. Commissioners said they need to work out how that's defined and develop a tracking system that allows for fair comparisons between companies.

"The point of the rule is to set an optimum level of reliability," said Commissioner Robert Clayton, who helped write the rules.

Clayton said it's also important that the reporting requirements come not just systemwide but at the circuit level, so regulators can identify if certain neighborhoods regularly have problems.

"The systemwide numbers will mask the problem areas," he said.

Supporters and opponents of the idea said it's still early and the proposal will be refined.

Two other related rules -- on tree trimming and utility infrastructure -- are further along in the process but also could still see more changes.