Mo. Attorney General Nixon sues Ameren over Taum Sauk breach

ST. LOUIS -- Missouri Attorney General Jay Nixon sued Ameren Corp. on Wednesday over the Taum Sauk reservoir collapse, alleging the company endangered lives and caused millions of dollars in damage by placing profits ahead safety at the hydroelectric plant.

The mountaintop reservoir collapsed just before dawn one year ago today. A breach in its earthen walls sent a deluge of 1 billion gallons of water rushing over the popular Johnson's Shut-Ins State Park below. The campground was empty, but the park superintendent and his family were injured while being swept away in the flood. The park is still being repaired.

"This was one of the worst man-made disasters in Missouri's history, and our lawsuit alleges a long history of decisions by Ameren and its employees that led to this catastrophe," Nixon said at a news conference in St. Louis.

The lawsuit filed in St. Louis Circuit Court -- where Ameren is headquartered -- seeks compensation along with punitive damages from the state's largest utility.

Nixon said in April such a lawsuit was imminent. He said Wednesday it was delayed because he gave Ameren a chance to meet his demands for a "full and fair resolution of this matter" before he sued.

Ameren spokeswoman Susan Gallagher wrote in an e-mail that the company has been in settlement talks with Nixon since April.

"We have made a very significant offer to settle all liabilities -- the largest such offer in state history to our knowledge," Gallagher said in the e-mail.

The lawsuit apparently caught Ameren by surprise. During an unrelated teleconference Wednesday morning about recent massive power outages, Chief Executive Gary Rainwater said he didn't know what Nixon planned to announce later in the day.

"We have not had an opportunity to review the legal filing and cannot comment on it in any detail," Rainwater said in a statement. "However, we are disappointed over the filing of this lawsuit."

Ameren already has agreed to pay federal regulators a record $15 million fine for the reservoir collapse. An investigation by the Federal Energy Regulatory Commission found that Ameren knew of critical problems at the hydroelectric plant for months before the collapse, but did not fix them or close the plant.

Nixon's lawsuit thickens an already tangled dispute among Missouri agencies over the Taum Sauk reservoir collapse.

Last week, the Missouri Department of Natural Resources submitted its own settlement proposal to Ameren to cover fines and damage to the state park. Damage to the park and fines are expected to account for the lion's share of a settlement payment.

DNR Director Doyle Childers said he didn't want Nixon to represent the agency after the AP reported in the summer that more than $19,000 was funneled from Ameren's corporate treasury into Nixon's gubernatorial campaign after Nixon launched an investigation into the company.

Nixon suggested the DNR no longer has authority to negotiate civil claims with Ameren.

"If we're going to court, Chapter 27 says it's my job," he said, referring to state statutes that lay out the attorney general's powers.

"They're a permitting agency," he said of DNR, with a dismissive wave of his hand.

Nixon said the people of Missouri have enough faith in his record to trust him prosecuting a lawsuit against Ameren.

"I am not haunted by my public actions," he said.

DNR deputy director and lead attorney Kurt Schaefer said Nixon cannot independently file a lawsuit that seeks to recoup damages for the agency.

"It would be the same thing as an attorney going to court and trying to settle a case without consulting their client," Schaefer said. "Ameren is never going to settle with (Nixon) without us signing off."

Schaefer said the DNR sent a copy of its settlement proposal to Nixon's office for review before it was sent to Ameren. Nixon never responded.

"This is nothing more than political grandstanding," Schaefer said of the lawsuit.

Nixon's lawsuit is the first legal action to allege that senior Ameren officials told managers at the Taum Sauk reservoir to delay repairs because of economic concerns.

The 55-acre reservoir essentially acted like a giant bathtub that stored water until it was released to flow downhill through turbines to generate power. Ameren filled the basin when electricity was cheap, and emptied it when conditions were favorable to sell power on the open market for a profit.

Managers at Taum Sauk knew for months that gauges in the reservoir were broken, causing it to overflow at least once. Managers warned that the situation could cause the walls to collapse.

Nixon's lawsuit alleges that a Taum Sauk manager suggested on Nov. 14, 2005, that the reservoir be drained for three weeks during spring 2006.

"On November 23, 2005, AmerenUE Headquarters responded that while it would 'be good' to inspect the upper reservoir in the spring, it didn't 'justify economically,"' according to the lawsuit.

The lawsuit also cites Ameren's companywide compensation plan that was revealed by the AP in April.

The incentive plan pays out 60 percent of managers' annual operating bonuses for generating profits, meeting budgets and keeping plants open. Twenty percent is given for safety issues like avoiding lost-time accidents.

"We will ascertain through this litigation exactly how much money they were making by putting people at risk," Nixon said.