8-KOther Events

AMEREN CORP 8-K Report, Corporate Update (Sep 26, 2008)

Filed September 26, 2008For Securities:AEE

Summary

This 8-K filing from Ameren Corporation provides updates on two significant regulatory proceedings affecting its utility subsidiaries. In Illinois, the Commerce Commission (ICC) has issued a consolidated order approving rate increases for Ameren Illinois Utilities (CIPS, CILCO, and IP) for electric and natural gas delivery services. While the approved increases are lower than requested, they represent a net positive revenue adjustment. Notably, the ICC rejected requests for specific infrastructure investment rate adjustment mechanisms and modified the proposed natural gas revenue decoupling, opting instead to increase fixed customer charges. In Missouri, AmerenUE's request for an electric service rate increase is still pending before the Public Service Commission (MoPSC), with staff recommending a substantially lower increase than requested and opposing a fuel and purchased power cost recovery mechanism. The outcome of the Missouri proceeding, expected by March 2009, remains uncertain and is subject to further testimony and commission decisions. Investors should monitor the potential for rehearing or appeals in the Illinois cases and the eventual outcome of the Missouri rate case. The approved Illinois rate increases will become effective October 1, 2008, contributing to revenue generation. However, the rejection of certain mechanisms and the reduced revenue in Missouri highlight the ongoing regulatory risks and the importance of regulatory decisions to Ameren's financial performance. The company is evaluating the ICC order and its implications, with the potential for further action in both jurisdictions.

Key Highlights

  • 1Illinois Commerce Commission (ICC) approved a net increase in annual electric delivery service revenues of approximately $123 million for Ameren Illinois Utilities (CIPS, CILCO, IP), less than the $156 million requested.
  • 2ICC approved a net increase in annual natural gas delivery service revenues of approximately $39 million for Ameren Illinois Utilities, also less than the $51 million requested.
  • 3Ameren Illinois Utilities' requests for rate adjustment mechanisms for electric infrastructure investments were rejected by the ICC.
  • 4In Missouri, MoPSC staff recommended an increase in annual electric revenues for AmerenUE of $51 million, significantly lower than the $251 million requested by UE.
  • 5MoPSC staff opposed AmerenUE's request for a fuel and purchased power cost recovery mechanism.
  • 6The ICC's order in Illinois is expected to be effective October 1, 2008.
  • 7The final decision from the Missouri Public Service Commission (MoPSC) for AmerenUE's rate case is not expected until March 2009.

Frequently Asked Questions

The ICC approved net increases in annual revenues for electric delivery service of approximately $123 million (aggregate) and for natural gas delivery service of approximately $39 million (aggregate) for Ameren Illinois Utilities (CIPS, CILCO, IP). These amounts are less than what the utilities initially requested. The ICC also rejected the utilities' proposed rate adjustment mechanisms for electric infrastructure investments.

AmerenUE requested an increase of $251 million in annual electric revenues. However, MoPSC staff have recommended a much lower increase of $51 million and have opposed the implementation of a fuel and purchased power cost recovery mechanism. A final decision from the MoPSC is not expected until March 2009.

The rate changes approved by the ICC in Illinois are expected to become effective on October 1, 2008.

Yes, the filing states that Ameren Illinois Utilities are evaluating the ICC's order and may seek rehearing or appeal aspects of it. Similarly, intervenor parties may also seek rehearing or appeal. In Missouri, the outcome is still uncertain as the proceeding is ongoing, and any decision can be subject to regulatory review.