PSC staff flays Ameren over attempt to alter rate deal

The Missouri Public Service Commission didn't act Wednesday on AmerenUE's request to change the way it splits revenue from wholesale energy sales, but the commission's staff denounced the proposal in a scathing response.

Ameren wants the commission to alter what is called the fuel adjustment clause included in a decision issued Jan. 27 that raised electric rates by 8.1 percent. The ice storm that crippled Southeast Missouri caused severe damage at Noranda Aluminum's New Madrid, Mo., plant, cutting production by 75 percent at Ameren's biggest customer.

Under the fuel adjustment clause, charges to customers for increasing prices for coal and natural gas will be offset by profits from wholesale power deliveries. Because Noranda won't be buying the power it usually uses for at least a year, Ameren wants to alter the rules to keep from returning up to $100 million to ratepayers.

The commission indicated it will rule Feb. 19, commission spokesman Kevin Kelly said.

The staff response notes that Ameren now wants to alter a rule it agreed to and at one point promised not to challenge. The staff even questioned the legality of Ameren's move and noted there are other avenues the utility could pursue.

"The law provides Ameren a remedy," wrote Steven Dottheim, PSC chief deputy general counsel. "But that remedy is not convenient to AmerenUE's plans, so AmerenUE is proposing to ignore the law and is offering a jerrybuilt resolution that no one is to question."

The staff also noted that considerable work would be needed to review the Ameren request, work that would have to be done by staff busy with other major rate cases. "This is not a situation where there is staff assigned solely to process AmerenUE filings, waiting in the commission's offices for AmerenUE filings or submittals to be received no matter when, primed to leap into action and work around the clock until the work is done, no matter what the work may involve."

Ameren's proposal also brought a sharply negative response from a coalition of manufacturers. The Missouri Industrial Energy Consumers urged the commission to reject the request. "Ameren asked for an FAC," wrote Diana Vuylsteke, attorney for the manufacturers' group. "Ameren got exactly what it wanted. Now AmerenUE wants to retrade the deal. Ameren designed, requested and agreed on the FAC, yet even before it has taken effect Ameren wants to redesign it to make it better for AmerenUE and worse for its customers."

An AmerenUE representative, Mike Cleary, said the document was being reviewed and had no other comment.

rkeller@semissourian.com

388-3642

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