Public meeting on AmerenUE rate increase in Dexter today

EDITOR'S NOTE: This story has been changed to remove the Missouri Office of Public Council from the list of organizations that are part of The Fair Electricity Rate Action Fund. The office is not a member of this group.

DEXTER, Mo. -- AmerenUE has proposed an 18 percent rate increase in electric rates. The Missouri Public Service Commission is holding a public comment hearing today at the Dexter Armory on Highway 114 East in Dexter between 6 p.m. and 9 p.m. for customers to comment or ask questions about the proposed increase.

AmerenUE filed a request with Missouri regulators last July to raise electric rates by 18 percent, which would be the utility's largest increase in at least two decades.

The proposed rate increase would increase the average household's bill by $180 a year, or $15 a month.

Nearly half of the request is primarily driven by investments made to continue system-wide reliability improvements for customers, increases in costs essential to generating and delivering electricity and higher financing costs, said Warner Baxter, AmerenUE president and chief executive officer. The remainder of the request (slightly more than half) is to cover higher fuel costs and lower revenues from sales outside UE's system, stated Baxter.

"Our customers have told us that reliability is their highest priority," Baxter continued, "We have listened and responded by making significant reliability improvements, largely through our Power On program, and those investments are working.

"While our current rates are among the lowest in the nation, we know that rising costs to meet customer expectations for reliability, as well as federal and state requirements for renewable energy and cleaner air, are going to continue to drive up energy costs," said Baxter. "Our current rates simply do not reflect the investments we have made and the costs we are incurring to deliver safe, reliable power to our customers."

The Missouri Public Service Commission will make the final decision by June.

If approved by regulators, the rate hike would be AmerenUE's largest in at least 20 years. The utility did not raise rates from 1987 to 2007. Then the company had a two percent rate increase in 2007, and an eight percent rate hike in 2008. In January, Missouri regulators approved an electric rate increase of $162.6 million.

"Eighteen percent is a lot," said Lewis Mills Jr., Missouri's Public Counsel. "And they just got a rate increase last year and one the year before that."

The Fair Electricity Rate Action Fund (FERAF) announced Dec. 10 that it will be conducting a public relations effort to educate Missouri families about Ameren's 18 percent rate hike request before the Missouri Public Service Commission (PSC).

FERAF is made up of the AARP, Missouri Industrial Energy Consumers (Anheuser-Busch, Boeing, Doe Run, Ford, General Motors, Noranda Aluminum, Monsanto and 12 other major St. Louis industrial companies), The Missouri Retailers Association (Schnuck's, Macy's, J.C. Penney and other commercial customers of AmerenUE ), Consumer Council of Missouri and The Midwest Energy Users Association (WalMart, Best Buy).

That group has more recently filed a joint pleading with the Public Service Commission. The joint pleading came in response to a filing by Ameren for a "request for clarification respecting application of the Commission's statutes and standard of conduct rules."

AmerenUE has suggested that it would serve the public interest for the PSC to provide guidance whether particular activities are permissible; such as whether parties may engage in a public relations or an advertising campaign designed to address matters in the rate case.

"FERAF's public relations effort will educate Missourians through every available means about the impact Ameren's 18 percent rate hike would have on Missouri's working families," said a news release from FERAF. "In the last eight years, Ameren has requested rate increases on Missouri electrical consumers of $1.4 billion and is requesting another 18 percent increase now, despite a Missouri unemployment rate of roughly 9 percent."

"As FERAF members, we respect the PSC and its process and want to make sure as many Missourians as possible know about Ameren's requested 18 percent rate hike," said Bob Quinn, executive director of the Missouri Association for Social Welfare, a FERAF member. "In order to ensure that, we'll be communicating with Missourians directly about the request before the PSC to raise their electricity rates by 18 percent."

"AmerenUE has historically engaged in major advertising campaigns to support each of the rate cases it has filed since 2002 (proposals totaling $1.4 billion in rate increases over this period)," said the news release, "It is curious that AmerenUE suddenly seeks a Missouri Public Service Commission ruling that a public information campaign is unlawful."

AmerenUE is the Missouri utility subsidiary of St. Louis-based Ameren Corp. (NYSE: AEE), which serves 2.4 million electric customers and 1 million natural gas customers in a 64,000-square-mile area of Missouri and Illinois.