PSC hearings

AmerenUE took it on the chin last week in a hearing conducted by the Missouri Public Service Commission in Cape Girardeau and Dexter. The hearing was one of a number the PSC held around the state to gauge public reaction to the utility's request for a $360 million annual increase in revenue.

Residential customers would see electric bills go up by 10 percent, while industrial users would pay 43 percent more.

Witnesses in Dexter complained about the company's service, citing power outages and surges. In Cape Girardeau, where attendees were linked in a video conference to the Dexter site and the PSC in Jefferson City, Mayor Jay Knudtson criticized the company's service record and worried about the negative effect a rate increase could have on the city's ability to attract business and industry. The city itself would pay 24 percent more -- an additional $175,000 -- for electricity under the Ameren proposal.

Through the proposed increase, AmerenUE is seeking 12 percent return on investment. Instead of a rate increase, the PSC staff has recommended a rate cut of up to $168 million and says a 9.25 percent return on investment is fair.

Part of the increase AmerenUE wants would cover a jump in the utility's tree-trimming budget. The lack of tree trimming is one of the criticisms leveled at Ameren during the PSC hearings. In St. Louis, where July storms knocked out service to 645,000 customers for an extended period and a Nov. 30 storm left 290,000 customers without power for as much as a week, hearing witnesses accused AmerenUE of making big profits while delivering poor service.

The Missouri Industrial Energy Group, which represents some of the state's largest industrial customers, has criticized AmerenUE for putting too much of the burden on larger users and questions the company's projections on costs and revenue.

AmerenUE counters that electric rates in Missouri are 37 percent below the national average, that its investment in infrastructure has increased by 50 percent in the past five years and its costs for fuel and other materials have soared.

In a filing with the PSC last week, AmerenUE suggested ways to make the power grid more resistant to storms, such as more tree trimming and inspections and burying more power lines, but warned that these changes will cost ratepayers.

The PSC obviously thinks AmerenUE can do a better job of preventing and responding to widespread outages. Its duty now is to provide AmerenUE with a fair return on its investment while making sure the utility's customers are getting what they pay for.