PSC orders Ameren to refund $17 million to customers
April 29, 2011
Missouri regulators have ordered Ameren to refund customers more than $17 million from power sales to other utilities over the past two years.
The Public Service Commission, which announced the decision Thursday, hasn't yet calculated the proportion to be credited to residential customers as opposed to businesses. And whatever the amount is, it probably won't be obvious on bills because it will be offset against future fuel costs.
The commission voted 3-2 to order the refund sought by consumer groups who claimed the utility wrongly excluded revenue from two power contracts that should have been credited to customers.
St. Louis-based Ameren is "extremely disappointed" by the order and is considering its legal options, spokeswoman Rita Holmes-Bobo said.
The PSC staff sought a refund last summer following an audit of Ameren's fuel costs. The audit was required under a new fuel surcharge approved by the commission in January 2009.
The controversial surcharge allowed Ameren to recover fuel costs more quickly than it had been allowed to in the past. In exchange, the utility was required to credit customers with 95 percent of profit from sales of excess power, known as off-system sales.
A day after the PSC approved the surcharge, a crippling ice storm struck southeast Missouri, knocking down transmission lines to Noranda Aluminum's sprawling plant in New Madrid.
The sudden loss of electricity severely damaged the plant, knocking out two thirds of its productive capacity for a year, and leaving Ameren with plenty more excess generation to sell.
The aluminum smelter is easily the utility's largest customer, consuming as much power as the city of Springfield, Mo. The loss of demand from most of the plant sitting idle for a year represented $90 million in lost electricity sales.
Ameren sought to make up the loss in part by entering into a 100-megawatt, 15-month contract with American Electric Power Service Corp. and a 150-megawatt, 18-month contract with Wabash Valley Power Association Inc. The agreements ran through May through November 2010, respectively.
Ameren contended the contracts didn't qualify as off-system sales under provisions of the 2009 fuel surcharge. The PSC disagreed.
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