ST. LOUIS, July 24 /PRNewswire-FirstCall/ -- AmerenUE, the Missouri
utility company of Ameren Corporation (NYSE: AEE), will be filing today a
request for an electric rate increase with the Missouri Public Service
Commission (MoPSC). If approved in its entirety, the request would mean an
increase of less than 50 cents per day for the average household (based on a
residential customer average of 1,100 kilowatt hours used each month). Each
household's increase would vary according to the amount of electricity used.
The $402 million request represents an 18 percent increase in rates.
Nearly half of the request is primarily driven by investments made to continue
system-wide reliability improvements for customers, increases in costs
essential to generating and delivering electricity and higher financing costs.
The remainder of the request (slightly more than half) is to cover higher fuel
costs and lower revenues from sales outside UE's system. The MoPSC will
conduct a thorough review of the company's request and offer opportunities for
public comment. A final decision is expected by June 2010.
"Our customers have told us that reliability is their highest priority,"
said Warner Baxter, AmerenUE president and chief executive officer. "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," said Baxter. "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."
Today UE's electric rates are approximately 40 percent below the national
average and more than 20 percent below the approved electric rates of other
investor-owned utilities in the state of Missouri.
"We know these rate increases create hardships for some of our customers,
especially during this difficult economic period," Baxter said. "As a result,
we are taking proactive steps to reduce costs, launching energy efficiency
initiatives and providing several energy assistance programs to help customers
with their energy costs now and in the future.
"Our customers expect us to tighten our belts during this challenging
economic period, just as they are. 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," added Baxter.
To give customers more control over their energy usage and costs, UE
recently launched several residential energy efficiency programs, which
include purchase incentives for energy efficient lighting and appliances,
customer education and partnerships with retailers and contractors, according
to Baxter. More information about these programs is available at
UEfficiency.com. UE's business efficiency programs launched earlier this year.
"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," said
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
For those customers who are least able to afford higher energy costs,
Baxter outlined several assistance programs, including Clean Slate, Dollar
More, Low-income Home Weatherization programs and Air Conditioner give-aways.
"These programs are targeted to help customers with the greatest needs
during this difficult economic period," said Baxter. "We are pleased to
sponsor these initiatives because thousands of families benefit from these
"We will continue to make the best use of every UE asset to provide our
customers with safe, reliable and clean energy," said Baxter. "This increase
is needed to fulfill our commitment to our customers to continue to listen,
respond and deliver by providing reliable power, dedicated customer service
and vision for a sustainable future."
Other features of this request include:
-- An Environmental Cost Recovery Mechanism, or ECRM, to speed the
recovery time of federal or state required environmental investments.
-- An interim rate increase, of approximately 1.7 percent or $37 million
effective Oct. 1, for investments already serving customers. This
would reduce the length of time between when UE spends money and when
those funds are recovered. This interim increase is subject to refund
after a review of our entire case by the MoPSC.
-- Continuing the fuel cost recovery mechanism previously approved by the
MoPSC. (Under the existing fuel cost recovery mechanism, slightly more
than half of this requested increase would have been reflected in
adjustments to customers rates had today's filing not taken place.)
Additional information about this electric rate case will be available on
the Ameren Web site (www.ameren.com/ueprice).
AmerenUE serves approximately 1.2 million electric and 127,000 natural gas
customers. Ameren Corporation, through its utility companies, serves
approximately 2.4 million electric and nearly one million natural gas
customers over 64,500 square miles in Missouri and Illinois.
Statements in this release not based on historical facts are considered
"forward-looking" and, accordingly, involve risks and uncertainties that could
cause actual results to differ materially from those discussed. Although such
forward-looking statements have been made in good faith and are based on
reasonable assumptions, there is no assurance that the expected results will
be achieved. These statements include (without limitation) statements as to
future expectations, beliefs, plans, strategies, objectives, events,
conditions, and financial performance. In connection with the "safe harbor"
provisions of the Private Securities Litigation Reform Act of 1995, we are
providing this cautionary statement to identify important factors that could
cause actual results to differ materially from those anticipated. The
following factors, in addition to those discussed elsewhere in this release
and in our filings with the Securities and Exchange Commission, could cause
actual results to differ materially from management expectations suggested in
such forward-looking statements:
-- regulatory or legislative actions, including changes in regulatory
policies and ratemaking determinations and future rate proceedings or
future legislative actions that seek to limit or reverse rate
-- changes in laws and other governmental actions, including monetary and
-- changes in laws or regulations that adversely affect the ability of
electric distribution companies and other purchasers of wholesale
electricity to pay their suppliers, including UE;
-- the effects of increased competition in the future due to, among other
things, deregulation of certain aspects of our business at both the
state and federal levels, and the implementation of deregulation;
-- increasing capital expenditure and operating expense requirements and
our ability to recover these costs in a timely fashion in light of
-- the effects of participation in the Midwest Independent Transmission
System Operator, Inc.;
-- the cost and availability of fuel such as coal, natural gas, and
enriched uranium used to produce electricity; the cost and
availability of purchased power and natural gas for distribution; and
the level and volatility of future market prices for such commodities,
including the ability to recover the costs for such commodities;
-- the effectiveness of our risk management strategies and the use of
financial and derivative instruments;
-- prices for power in the Midwest, including forward prices;
-- business and economic conditions, including their impact on interest
rates, bad debt expense, and demand for our products;
-- disruptions of the capital markets or other events that make UE's
access to necessary capital, including short term credit and
liquidity, impossible, more difficult or more costly;
-- our assessment of our liquidity;
-- actions of credit rating agencies and the effects of such actions;
-- weather conditions and other natural phenomena, including impacts to
-- the impact of system outages caused by severe weather conditions or
-- generation plant construction, installation and performance, including
costs associated with UE's Taum Sauk pumped-storage hydroelectric
plant incident and the plant's future operation;
-- impairments of long-lived assets or goodwill;
-- recoverability through insurance of costs associated with UE's Taum
Sauk pumped-storage hydroelectric plant incident;
-- operation of UE's nuclear power facility, including planned and
unplanned outages, and decommissioning costs;
-- the effects of strategic initiatives, including acquisitions and
-- the impact of current environmental regulations on utilities and power
generating companies and the expectation that more stringent
requirements, including those related to greenhouse gases, will be
enacted over time, which could have a negative financial effect;
-- the inability of our counterparties and affiliates to meet their
obligations with respect to contracts, credit facilities and financial
-- the cost and availability of transmission capacity for the energy
generated by UE's facilities or required to satisfy energy sales made
-- legal and administrative proceedings; and
-- acts of sabotage, war, terrorism or intentionally disruptive acts.
Given these uncertainties, undue reliance should not be placed on these
forward-looking statements. Except to the extent required by the federal
securities laws, we undertake no obligation to update or revise publicly any
forward-looking statements to reflect new information or future events.
Media, Mike Cleary, +1-573-681-7137, or Tim Fox,
+1-314-554-4335, or Analysts, Doug Fischer, +1-314-554-4859, all of AmerenUE