8-KOther Events

AMEREN CORP 8-K Report, Corporate Update (Jun 1, 2010)

Filed June 1, 2010For Securities:AEE

Summary

This 8-K filing from Ameren Corporation (AEE) and its subsidiary Union Electric Company (UE) on May 28, 2010, reports on a significant regulatory decision by the Missouri Public Service Commission (MoPSC). The MoPSC approved an annual revenue increase for UE of $226.3 million, which is less than the $402 million initially requested and the $287 million amended request. This approved increase includes $118 million for higher fuel costs and lower off-system sales, reflecting the pass-through of 95% of fuel and purchased power cost changes. The decision also outlines specific regulatory mechanisms approved and denied. UE received approval for its existing fuel adjustment clause (FAC) and a vegetation management/infrastructure cost tracker. However, its request for a storm restoration cost tracker was denied. The MoPSC also approved certain stipulations, including UE's agreement to withdraw its environmental cost recovery mechanism request in exchange for deferring depreciation costs on pollution control equipment and the implementation of a mechanism to address lost revenues from potential operational issues at the Noranda Aluminum plant. These rate changes are expected to become effective by June 21, 2010.

Key Highlights

  • 1Missouri Public Service Commission (MoPSC) approved an annual revenue increase for Union Electric Company (UE) of $226.3 million.
  • 2The approved increase is lower than the initially requested $402 million and the amended request of $287 million.
  • 3A portion of the increase, $118 million, is allocated to cover higher fuel costs and lower revenues from off-system sales.
  • 4UE's existing Fuel Adjustment Clause (FAC) was approved for continued use, allowing for rate adjustments based on 95% of fuel and purchased power cost changes.
  • 5The MoPSC approved the continuation of a vegetation management and infrastructure cost tracker.
  • 6UE's request for a storm restoration cost tracker was denied by the MoPSC.
  • 7Several stipulations were agreed upon, including the deferral of depreciation costs for pollution control equipment and a mechanism to mitigate revenue loss from Noranda Aluminum plant operational issues.

Frequently Asked Questions

The key outcome is the Missouri Public Service Commission's (MoPSC) decision to approve an annual revenue increase for Union Electric Company (UE) of $226.3 million. This is a reduction from the company's initial and amended requests.

The approved revenue increase of $226.3 million is expected to result in rate changes becoming effective on or before June 21, 2010. A significant portion ($118 million) is tied to covering higher fuel costs and lower revenues from off-system sales, with 95% of fuel and purchased power cost changes passed through to customers via the Fuel Adjustment Clause (FAC).

The MoPSC approved the continued use of UE's Fuel Adjustment Clause (FAC) and a vegetation management/infrastructure cost tracker. However, UE's request for a storm restoration cost tracker was denied. Additionally, stipulations were approved regarding the deferral of depreciation costs for pollution control equipment and a mechanism to address revenue fluctuations related to the Noranda Aluminum plant.

The filing states that UE is evaluating the MoPSC's order and has not yet decided whether to seek a rehearing or appeal any aspect of the order. Other parties may also seek rehearing or appeal, and the outcome of any such actions is uncertain.