Groups at Odds Over Proposed Ameren Surcharge - The Missourian: Local News

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Groups at Odds Over Proposed Ameren Surcharge

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Posted: Thursday, May 2, 2013 5:00 pm | Updated: 12:10 pm, Fri May 3, 2013.

A bill in the state Legislature would put a new surcharge on Ameren Missouri customers’ bills, and the legislation is drawing opposing views from two officials.

The average Missouri household could pay $100 to $125 more per year if the bill passes, said Chris Roepe, director of the Fair Energy Rate Action Fund.

“It’s very bad for businesses and residential ratepayers,” Roepe said Monday.

But Ameren estimates customers would only pay about $1.50 more per month under the surcharge, said Scott Charton, spokesman for Missouri Electric Alliance.

‘Outdated’ Infrastructure

The money is needed to improve and replace Ameren’s outdated infrastructure, Charton said.

“It would be a huge reinvestment in infrastructure,” Charton said.

The bill, Roepe said, would put an “infrastructure system replacement surcharge” on Ameren Missouri bills “under the auspice” to upgrade infrastructure.

Roepe added that customers will not get any additional services but would have to pay more.

However, Charton said customers would get increased reliability from infrastructure upgrades.

Ameren Missouri made $400 million in profits last year and should use some of that money if it needs additional funding for projects, Roepe said. Ameren has raised its rates 43 percent in the last six years, Roepe added.

PSC Oversight

Another bad aspect to the bill is that it removes the state Public Service Commission from the process of increasing customers’ costs, Roepe said. This is an attempt to bypass the PSC’s oversight, he said, adding, “That’s bad for customers.”

Roepe added, “This is a take money now, ask questions later (method),” Roepe said.

But Charton said the bill actually increases protections for consumers beyond what is currently in place and increases the PSC’s scrutiny.

“It’s not a rubber-stamp process by any means,” Charton said.

Under the surcharge method, the PSC would have to give two approvals, Charton said. The initial approval to implement the surcharge could take about four months, Charton said.

Then there would be a general rate case set by the PSC to review how the money from the surcharge had been used, Charton said. If the PSC found that the money had been used incorrectly, then customers could get refunds, Charton said.

If the bill passes, the surcharge would not automatically go on customers’ bills, Charton said. Ameren would still have to file an application with the PSC to have the surcharge applied, he added.

The PSC could remove the surcharge after three years, Roepe said.

Regulatory Environment

The surcharge creates a more favorable regulatory environment for the state, Charton said. It would allow Ameren to reinvest in its infrastructure in a more timely manner, he added.

“It accelerates the replacement of parts and components,” Charton said, adding that the surcharge would allow Ameren to recoup the costs of infrastructure projects.

Currently, for an increase Ameren must go through a general rate case, which can take 11 months or more, Charton said.

The bill would kill jobs by driving up rates, which could force employers to lay off workers to cover increased overhead costs, Roepe asserted.

Charton said the bill would create jobs by employing workers on infrastructure construction and making the state better equipped for the high-tech sector, such as data centers.

There is a House version and Senate version of the bill, and the sponsors are State Sen. Mike Kehoe, R-Jefferson City, and State Rep. Jeanie Riddle, R-Mokane. Both bills are awaiting debate in the House and the Senate.

Charton noted that the bill not only applies to Ameren but the state’s other investor-owned utilities — Kansas City Power & Light and the Empire District Electric Co.

“This is a statewide impact,” Charton said.

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