STATE OF MISSOURI
PUBLIC SERVICE COMMISSION
At a session of the Public Service
Commission held at its office in Jefferson
City on the 16th day of April, 2014.
Noranda Aluminum, Inc., et al., )
)
Complainants, )
)
v. ) File
No. EC-2014-0224
)
Union Electric Company, d/b/a )
Ameren Missouri )
)
Respondent. )
Issue Date: April 16, 2014 Effective Date: April 16, 2014
On
February 12, 2014, Noranda Aluminum, Inc. and 37 other individual customers
filed a complaint against Union Electric Company, d/b/a Ameren Missouri,
alleging that the rate Noranda currently pays to Ameren Missouri for
electricity is now unreasonable. The
complaint alleges that because of low aluminum prices and other business
conditions, Noranda must have a rate reduction for its aluminum smelter to
remain financially viable. The complaint
asks the Commission to reduce the rate Noranda pays to $30.00/MWh and to
increase the rate paid by Ameren Missouri’s other customers to make the
adjustment revenue neutral for Ameren Missouri.
In response to that complaint, the Commission directed Ameren Missouri
to file its answer by March 17. Ameren
Missouri filed its answer on March 17, and on the same date filed a motion
asking the Commission to dismiss this complaint. The Complainants, Staff, and Public Counsel
responded in opposition to Ameren Missouri’s motion to dismiss on March 26 and
27. Ameren Missouri replied on April 15.
Ameren
Missouri asserts five reasons why the complaint should be dismissed. First, Ameren Missouri argues that the
complaint is an unlawful collateral attack on the Commission’s report and order
in Ameren Missouri’s most recent rate case, ER-2012-0166. Ameren Missouri supports that argument by
asserting that the facts alleged in the complaint fail to support any change in
circumstances since the 2012 rate case was decided. Ameren Missouri points out that much the same
arguments about the financial viability of the aluminum smelter were asserted
in that earlier rate case.
But
at this stage of the proceeding, the Commission has no basis to judge the accuracy
of the facts alleged by the complainants. On the contrary, when considering a motion to
dismiss for failure to state a claim, the Commission can only consider the
legal sufficiency of the complaint. The
facts alleged must be accepted as true and the complainant must be given the
benefit of all reasonable inferences from those facts.[1] The
complaint does allege that there has been a change in circumstances that would
justify a change in the rates paid by Noranda.
Whether the facts alleged by Noranda to show such a change in
circumstances are true and whether they support a Commission decision to reduce
the rate Noranda pays cannot be determined at this stage of the
proceeding. Ameren Missouri has not
demonstrated that the complaint is an unlawful collateral attack, and the
complaint cannot be dismissed on that basis.
Second,
Ameren Missouri argues that the complaint would require the Commission to
engage in unlawful single-issue rate making. Single-issue
ratemaking is a concept whereby the Commission would adjust rates based on a
narrow examination of a single factor without considering all other relevant
factors. Single-issue rate making is
improper because consideration of only one factor could show that a company is
underearning or overearning, resulting in a rate increase or decrease, while some
other factor that is not examined would show that the costs associated with the
single-factor were off-set by changes in costs associated with other,
unexamined, factors. The result of such
single-issue ratemaking could be an inaccurate assessment of the company’s
revenue requirement, resulting in unjust and unreasonable rates.
However,
concerns about single-issue rate making do not apply to this complaint because
this complaint is about rate design, not revenue requirement. In other words, the complainants are asking
the Commission to change the balance by which the company’s revenue requirement
is collected from the various customer classes.
The overall amount collected by the company, its revenue requirement,
would not be changed. Therefore, single-issue
ratemaking is not a concern.
Ameren
Missouri’s third argument is that the complaint is an improper attempt by
Noranda to use the complaint before the Commission to reform its electric
supply contract with Ameren Missouri.
However, the complaint does not seek to change the terms of that
contract. Rather, it seeks to change the
rates Ameren Missouri charges its customers, rates established by Ameren
Missouri’s tariffs, which are subject to review by the Commission.
Fourth,
Ameren Missouri argues that the complaint would require the Commission to
illegally sanction an unduly discriminatory rate in that it would require other
ratepayers to subsidize Noranda. Ameren
Missouri’s argument is not well founded at this time. Certainly the applicable law forbids rates
that are either unduly preferential or discriminatory. Perhaps the evidence will eventually show
that Noranda’s proposal is indeed unduly preferential or discriminatory, but that
is a question of fact and at this point, for the purposes of Ameren Missouri’s
motion to dismiss, there is no way to make that determination.
Finally,
Ameren Missouri argues that the Commission should exercise its discretion to
dismiss the complaint for good cause shown.
The good cause Ameren Missouri asserts is that the policy decisions
raised by the complaint should be addressed by the legislature. The Commission will certainly defer to any
decision made by the legislature. But
the possibility of action by the legislature does not relieve the Commission of
the responsibility to consider a complaint brought before it.
Ameren
Missouri’s Motion to Dismiss Complaint is not well founded and will be denied.
THE COMMISSION
ORDERS THAT:
1. Ameren Missouri’s Motion to Dismiss Complaint is denied.
2. Ameren Missouri’s Request for Oral Argument is denied.
3. This order shall become effective upon issuance.
BY
THE COMMISSION
Morris
L. Woodruff
Secretary
R. Kenney, Chm., Stoll, W. Kenney,
Hall, and Rupp, CC., concur.
Woodruff, Chief Regulatory
Law Judge