The company’s proposal if approved in its entirety, would increase the electricity rate by less than 50 cents per day for the average household (based on a residential customer average of 1,100 kilowatt hours used each month). The variations in the increase in the electricity rates would vary according to the amount of electricity used. The $402m proposal would represent 18% increase in rates.
Approximately 50% of the proposal is driven by increases in costs essential to generating and delivering electricity and higher financing costs and investments made to continue system-wide reliability improvements for customers. The rest of the 50% is to cover higher fuel costs and lower revenues from sales outside UE’s system.
The MoPSC would conduct a review of AmerenUE’s proposal and offer opportunities for public comment, and the final decision on the proposal is expected by June 2010.
Warner Baxter, president and chief executive officer of AmerenUE, said: “We have listened and responded by making significant reliability improvements, largely through our Power On program, and those investments are working. While our current rates are among the lowest in the nation, we know that rising costs to meet customer expectations for reliability, as well as federal and state requirements for renewable energy and cleaner air, are going to continue to drive up energy costs. Our current rates simply do not reflect the investments we have made and the costs we are incurring to deliver safe, reliable power to our customers.”
Currently the electric rates at UE are around 40% and 20% less that the national average and the approved electric rates of other investor-owned utilities in the state of Missouri respectively.
Baxter, said: As a result, we have already reduced certain planned expenditures in 2009. In addition, we are considering several cost reduction measures, including executive compensation. Over the next two years, we are currently targeting to reduce certain expenditures in excess of $150 million below 2008 levels. However, we will not tighten our belts at the expense of providing safe, reliable service to our customers.”
According to Baxter, UE recently launched several residential energy efficiency programs include purchase incentives for energy efficient lighting and appliances, customer education and partnerships with retailers and contractors, in order to give customers more control over their energy usage and costs. Additional tools for all customers include UE’s Energy Savings Toolkit and Personal Energy Report. Budget Billing also helps customers balance out bills throughout the year, eliminating surprises, particularly in the hot summer months.
Baxter has outlined various assistance programs, including Clean Slate, Dollar More, Low-income Home Weatherization programs and Air Conditioner give-aways, for those customers who are least able to afford higher energy costs.
Baxter continued that: “The goal of the residential and business efficiency programs is to reduce usage by 540 megawatts, the output of a medium-sized coal-fired power plant, by 2025,” he said. “Our customers will save on their bills, help the environment and defer the need to build an expensive new power plant.”
AmerenUE serves approximately 1.2 million electric and 127,000 natural gas customers. Ameren, through its utility companies, serves approximately 2.4 million electric and around one million natural gas customers over 64,500 square miles in Missouri and Illinois.
