The Missouri Public Service Commission’s decision last Wednesday in the Ameren Missouri electric rate case marks the state’s historic transition from an electric system based on load growth to one founded on energy efficiency and new resources to help consumers themselves control utility costs.
“Today’s decision marks a major transition from load-growth to energy efficiency for Ameren’s customers,” PSC Chairman Kevin Gunn said. “This is an important milestone allowing Ameren’s customers to take control of their energy bills.”
Chairman Gunn praised the Office of the Public Counsel, consumer groups, state lawmakers, the PSC Staff and Ameren Missouri for working together to reach consensus on the energy efficiency framework contained in SB 376, the Missouri Energy Efficiency Investment Act (MEEIA).
This law, sponsored by Sen. Brad Lager, was passed by the Legislature and signed into law by Gov. Nixon in 2009 and implemented through a rulemaking completed by the PSC in February of 2011.
PSC approval of the Ameren order, implements these efficiency changes for the first time under MEEIA in a case in which the company sought a $375.6 million increase, a return on equity (ROE) of 10.5 percent and an increase in fixed charges on residential customers’ monthly bills from $8 to $12.
In its original request, the company cited higher fuel costs, investments to improve the reliability of Ameren Missouri’s aging infrastructure and to comply with environmental and renewable energy regulations as reasons for seeking a rate increase.
In a 3-1 vote, the Commission allowed an increase of $260 million – approximately $115 million less that the company requested; an ROE of 9.8 percent and rejected any increase in the fixed charges on customer’s bills.
While allowing the company to recover prudently incurred fuel costs totaling more than $100 million, the order also contains $89 million in programs and incentives to help customers reduce the costs of their electric bills. These programs – seven for residential customers and four for business customers – are expected to begin in January.
The seven residential programs include: Lighting (incentives offered to encourage the use of efficient lighting); Energy Efficiency Products (the use of energy efficient products in the home such as programmable thermostats and weatherproofing products); HVAC (incentives for replacing qualified heating and cooling systems); Refrigerator Recycling (retiring inefficient working refrigerators and freezers by providing an incentive to take the units out of homes and recycling them in an environmentally safe manner); a pilot program that encourages home audits and cost-effective improvements; ENERGY STAR® New Homes and Multifamily Low Income (designed to deliver long-term energy savings and bill reductions to low-income customers through education and a variety of directly installed cost-saving measures).
As part of this rate case, the Commission approved agreements to continue Ameren Missouri’s low-income weatherization program and re-establish Ameren’s “Keeping Current” program, which is designed to help low-income customers pay off delinquencies and to encourage the elderly or individuals with disabilities to use air-conditioning for their health and safety on the hottest days of the year.
The PSC staff estimates that the impact of the rate increase on an Ameren Missouri residential customer using 1,100 kWh (kilowatt hours) a month will be about $10.00 a month, but this rate would be for customers who did not take advantage of any of the energy efficiency programs authorized in the order. It is expected that new rates will take effect in January 2013.
“No one likes to raise utility rates,” Gunn said. “For the first time, this order by the Commission gives consumers the tools they need to offset increases – and more – on their monthly utility bills.”
Ameren Missouri provides electric service to approximately 1.2 million electric customers in Missouri.