Electricity rate, over-earnings fight may cost customers

A fight between Noranda Aluminum and Ameren Missouri was expected to cost utility customers almost regardless of the outcome.

Noranda filed two complaints with the state Public Service Commission, asking for a lower rate for electric from Ameren Missouri and accusing the company of over-earning.

“We want to be average to compete in a global market,” said New Madrid operations director Darin Halter.

Noranda and Ameren agreed the company had the lowest rate of Ameren’s customers. But officials with Noranda told ABC 17 News on Wednesday it ranked second highest among smelters.

The aluminum producer asked for its electric rate to drop from about $41 per megaWatt hour to $30 per megaWatt hour.

Ameren warned lowering that rate would pass higher rates on to other customers, including those in Mid-Missouri.

“At some point it becomes uneconomical to run the plant and what we’re saying is that we need a sustainable power rate for the foreseeable future to make our plant sustainable,” Halter said.

The second complaint, one echoed by many in the standing room only public hearing Wednesday, was about Ameren earning more than the state allowed.

“We clearly can see by their numbers, they’re cherry-picking the facts,” said Ameren Missouri Vice President of External Affairs and Communication Warren Wood. “The fact of the matter is when you look at our books and records, as the Public Service Commission has already done, you can see that we are not over-earning”

The Public Service Commission said it did not find any evidence that it needed to do an earnings investigation of the company, though. Ameren called the claim a distraction.

“It’s clear this is an orchestrated effort by a hedge-fund controlled company to extract millions of dollars from our customers and send them to a hedge fund in New York,” Wood said.

State Representative Chris Kelly (D-Columbia) joined a couple other lawmakers in giving sworn testimony on the complaints after the public hearing.

Kelly said the PSC’s decision could, in effect, set a precedent for the commission giving subsidies to groups of customers. He called it legislative business.

“We regularly … participate in flat putting money on the table for this industry or that to keep them in the state of Missouri,” Kelly told the commissioners. “That’s not your business, that’s our business.”

The PSC set evidentiary hearings for the first complaint, about electric rates, to begin Monday. Hearings on the over-earning complaints were scheduled to begin in July.

The PSC said it expected to have decisions in the cases by the end of September.