Regulators reject Noranda's challenge to Ameren rates

JEFFERSON CITY, Mo. -- State utility regulators rejected a complaint from a Southeast Missouri smelter that alleged Ameren Missouri earned more than it's entitled on electricity rates.

The Missouri Public Service Commission voted unanimously to dismiss a case brought by Noranda Aluminum of New Madrid, Missouri, and various individual customers asserting that Ameren Missouri's electricity rates should be reduced based on allegations it has earned more than regulators allowed.

The commission also declined to reconsider Noranda's request for a reduction in its own electricity rates, which could have resulted in higher bills for other Ameren Missouri customers.

Ameren's largest electric customer is Noranda's aluminum smelter in New Madrid. Noranda already receives reduced electricity rates, but it had sought an additional 25 percent reduction.

After regulators denied that request in August, Noranda announced last month it would lay off up to 200 employees and suspend an expansion project. The PSC denied a request to reconsider Noranda's rate reduction while also rejecting Noranda's separate complaint that Ameren is earning more than allowed.

That decision came the same day Ameren Missouri filed information with the utility regulatory agency updating its 20-year plan for energy production. The St. Louis-based utility said it plans to shut down six coal-fired generating units in the St. Louis area while adding power plants in unspecified locations that would be fueled by natural gas, wind, sunlight and methane gas released by landfills.

In general, Ameren Missouri is proposing a greater reduction in carbon-dioxide emissions but at a slower pace than would be prescribed for Missouri under proposed regulations by the federal Environmental Protection Agency.

"We are committed to accomplishing this transition to cleaner energy in a way that is cost-effective and environmentally responsible while maintaining the reliability our customers expect," Michael Moehn, Ameren Missouri's chairman, president and CEO, said in a statement.

Ameren Missouri is the state's largest electricity provider, serving 1.2 million customers.

Documents filed with regulators show the utility got 77 percent of its energy from coal-fired power plants last year and has a goal of reducing that to 62 percent by 2034.

Ameren said it plans to convert two of the four coal-fired units at its Meramec Energy Center south of St. Louis to natural gas by 2016 and then follow through with previously announced plan to shut down the site by 2022. Ameren said it plans to close its Sioux Energy Center north of St. Louis, which has two coal-fired units, by 2033.

The lost production capacity from the Sioux Energy Center largely would be replaced by new facilities powered by natural gas and wind. Smaller amounts of energy also would come from new solar and hydroelectric plants and from landfill-gas generation.

The company said it also plans to continue to offer energy efficiency incentives to customers and expects to reduce the demand for electricity enough that it won't have to replace all of the lost production capacity from the Meramec facility.

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