Just a month ago Ameren was granted a $172 million, 7% rate increase, now it is moving in for another. Last months rate increase followed a 10.4% last year. In all, since 2007 Ameren's rates have increased 31%. But hey, they're not done yet. A bill quietly in the works in the Missouri State Legislature-even though the session ended months ago- would give Ameren another $45 million increase, this time to pay for obtaining an early site permit from the U.S. Nuclear Regulatory Commission for a proposed nuclear plant in Callaway County.
You may wonder why the state legislature is involved instead of the Missouri Public Service Commission, which regulates utility rate increases. The answer is because of a voter approved law passed in 1978 that prevents utilities from charging customers for the cost of constructing power plants until they are generating power. That law must be changed for Ameren's plan to succeed. Another obstacle is Noranda Aluminum and other industrial customers of Ameren who use large amounts of electricity. It is estimated that Ameren's proposed $45 million increase would cost Noranda Aluminum $2.5 million over the next 5 years. Not to worry, our state legislators are always eager to help large corporations, so the legislation would "cap" the rate impact for industrial power users at $100,000. Who will pick up the slack for the special deal for these industries? You quessed it, the rest of us, lowly residential customers and small businesses will have to subsidize the big industrial users by paying the difference
And it gets better. Another snag in the bills process is that the nuclear plant rate hike is being tied to efforts to reduce the amount of clean energy utilities are required to use, those requirements were approved by voters 2008.
It's important to remember that at the debate over funding the proposed nuclear plant isn't about the safety of nuclear power, although Japan's recent problems should give us pause. The question is who should pay for the construction of the plant, consumers or Ameren's stock holders? If this plant was such a great idea, it shouldn't be hard for Ameren to raise the funds through it's inverstors, right? The reality is that nuclear plants are an expensive gamble, and it's easier to force rate payers to pick up the tab than to ask stockholders to stick their necks out. It's also important to remember that the $45 million is just the tip of the iceberg, it covers the permit process only. The actual cost of building the plant will be in the billions, and we know who will be asked to pay for it.
Governor Nixon, who supports Ameren's proposal, is not likely to call a special session for the bill just yet, but you can bet this $45 million mess will come up for a vote when the state legislature reconvenes. That still gives the "little people" some time to let their elected officials know how they feel about paying for Ameren's gamble.