FOR IMMEDIATE RELEASE -- August 20, 2014
Contact: Kevin Kelly (573) 751-9300
PSC Denies and Dismisses Noranda Complaint Against Ameren Missouri
JEFFERSON CITY---The Missouri Public Service Commission has determined that a complaint filed by Noranda Aluminum, Inc. and 37 other individual customers against Ameren Missouri should be denied and the case dismissed. The Commission’s vote was 5-0.
Noranda Aluminum had asked the Commission to reduce the rate that it pays to Ameren Missouri alleging that the current rate was unreasonable. Noranda sought the reduction based on three contentions: 1) Noranda Aluminum, Inc.’s aluminum smelter is crucial to Missouri’s economy; 2) the smelter cannot be sustained without the rate relief requested; and 3) all Ameren Missouri ratepayers will directly benefit from the relief requested because granting that relief is more beneficial compared to Noranda leaving the Ameren Missouri system. “While there is substantial evidence in the record regarding the impact of the smelter on southeast Missouri and on the state,” the Commission said, “the evidence does not support the second and third of Complainants’ contentions.”
The Commission noted in its order that the New Madrid smelter is very important to the economic health of the entire state and it sympathizes with Noranda’s employees and the residents of the New Madrid area who testified at the local public hearings in this case. The Commission, in its order, stated it certainly does not want the smelter to close. “But the Commission determines that the evidence presented in this case does not warrant a departure from cost-of-service ratemaking,” the Commission said. “The Complainants have not demonstrated a liquidity crisis nor adequately demonstrated that Ameren Missouri’s remaining ratepayers would be better off if Noranda took service at its requested rate than they would be if Noranda exited Ameren Missouri’s system. Finally, and importantly, a request for an economic development subsidy of this magnitude is more properly directed to the Missouri General Assembly.”
After the record closed, after briefs were filed, and after the Commission publically began its deliberations at an agenda meeting, the Complainants and other parties filed a series of non-unanimous stipulations and agreements, which were formally opposed by Ameren Missouri and the PSC Staff. Since those stipulations and agreements were opposed, under Commission rules, they can only be treated as revised positions of the signatory parties. The Commission noted in its decision today that it found the proposals intriguing and encouraged the parties to continue to pursue negotiations on a compromise position as it could be considered in Ameren Missouri’s current rate case.
On February 12, 2014, Noranda Aluminum, Inc. and 37 other individual customers filed a complaint with the Public Service Commission alleging the rate Noranda currently pays to Ameren Missouri for its electricity was unreasonable. The complaint alleged 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 asked 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.
Ameren Missouri provides electric service to approximately 1.2 million customers in Missouri.