PR-11-172 -- PSC Determines Ameren Missouri Electric Customers Should Receive $17 Million Refund

Contact: Kevin Kelly (573) 751-9300

FOR IMMEDIATE RELEASE -- APTIL 29, 2011

JEFFERSON CITY---The Missouri Public Service Commission has determined that certain Ameren Missouri power sales agreements with American Electric Power Operating Companies (AEP) and to Wabash Valley Power Association, Inc. (Wabash) during the period of March 1, 2009 through September 30, 2009, should be considered as off-system sales and, therefore, those revenues should be flowed through the company’s Fuel Adjustment Clause (FAC).  As a result, the Commission has determined electric customers of Ameren Missouri should receive a $17.1 million refund to be applied in a future Ameren Missouri FAC filing. 

The Commission’s vote was 3 to 2.  Commissioners Jeff Davis and Terry Jarrett are expected to file dissents in the case.

The Commission determined, based upon the evidence in the case, that Ameren Missouri should not have excluded revenues derived from the power sales agreements with AEP and Wabash from off-system sales revenue when calculating the rates charged under its fuel adjustment clause.

Ameren Missouri had contended that the power sales to AEP and Wabash did not fall under the definition of off-system sales under the FAC.  Ameren Missouri further contended that these contracts were intended to replace the loss of power sales to its largest customer, Noranda Aluminum, due to the terrible ice storm that struck southeast Missouri on January 27, 2009, disrupting Noranda’s operations for an extended period of time.

 This case was the first prudence review of costs subject to Ameren Missouri’s fuel and purchased power adjustment clause.  Such a review is required to take place at least every 18 months.  In this case, the PSC staff reviewed for prudence, the costs and revenues associated with Ameren Missouri’s FAC for the period of March 1, 2009 to September 30, 2009.

Based upon its review, the PSC staff had alleged that Ameren Missouri was imprudent for not including all costs and revenues associated with certain sales to AEP and Wabash during the period of March 1 through September 30.  Staff had alleged that energy sales to AEP and Wabash during this period should have been treated as off-system sales for purposes of Ameren Missouri’s FAC and, therefore, a refund of approximately $17.1 million should be made to Ameren Missouri’s electric customers.

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

-30-

Case No. EO-2010-0255