PR-10-215 -- PSC Issues Decision in AmerenUE Rate Case

Contact: Gregg Ochoa (573) 522-2760

FOR IMMEDIATE RELEASE -- MAY 28, 2010

JEFFERSON CITY – The Missouri Public Service Commission today voted to grant an electric rate increase of approximately $226.3 million to AmerenUE – significantly less than it originally requested.  The rate increase is mostly due to higher costs in fuel that AmerenUE uses at its power plants to generate electricity for its customers and for investments made in new infrastructure.  AmerenUE would have recovered those prudent fuel costs through a fuel adjustment clause (FAC) mechanism.

The Commission’s vote was 4-1, with Chairman Robert Clayton issuing a dissenting opinion.

The PSC Staff estimates that the impact on the average residential customer will be approximately $9 per month, based on 1,100 kilowatt hours per month.

As part of its decision, the Commission reduced AmerenUE’s return on equity (ROE), or profit margin, to 10.1 percent (down from 10.6 percent awarded in the company’s last rate case.). In its original filing, AmerenUE had requested an ROE of 11.5 percent.

“While I’m dissenting because of differences in opinion on a number of issues, the Commission’s decision makes significant improvements in policy from past PSC rulings,” said Chairman Clayton.

The Commission highlighted some of those policy issues:

• A reduction in the company’s authorized ROE;
• AmerenUE is charged with new energy efficiency mandates to empower customers to take control of their bills;
• More than $1 million has been set aside for a new pilot program to assist low income customers;
• The rate design outlined in this case lessens the impact on residential customers;
• Dozens of issues in this case were settled by unanimous stipulated agreements; and
• Based on the testimony at the 19 public hearings, the Commission has evaluated and improved its outreach and education efforts.

The Commission previously approved an agreement by several parties in the rate case which will establish a pilot program to assist certain low-income customers with their electric bills.  The program, scheduled to last two years, will be funded by AmerenUE and its customers. 

An advisory group of those parties to the agreement have been working on details of the program which will be considered for Commission approval.  The target date for pilot program implementation is August 1, 2010.  

When AmerenUE filed its rate request on July 24, 2009, it sought to increase annual electric operating revenues by approximately $402 million. According to the company, the increase would allow the company to continue its system wide reliability improvements and to cover increasing costs for fuel, transportation and materials needed to generate and produce electricity.

AmerenUE provides electric service to approximately 1.2 million customers in Missouri.

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Case No. ER-2010-0036