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Report & Order - Ameren [12/12/

Report & Order - Ameren [12/12/

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12/12/2012

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A.

If the Commission authorizes a two-way storm restoration cost tracker
for Ameren Missouri, should storm assistance revenues received from other utilities
be included in the tracker or annualized and normalized and included as an offset in
revenue requirement?

301

In the Matter of Union Electric Company, d/b/a Ameren Missouri’s Tariff to Increase its Annual

Revenues for Electric Service, File No. ER-2011-0028, Report and Order issued July 13, 2011,
Page 22.

100

B.

What amount of storm assistance revenue should be included in the

cost of service?

Findings of Fact:

1.

Storm assistance revenue is the amount of money Ameren Missouri receives

to reimburse it for the labor costs associated with use of its crews for storm restoration work

performed for other utilities around the country.302

While this is not a regular source of

income, Ameren Missouri reported receiving such revenue on eleven occasions since July

2005.303

2.

Staff and MIEC propose that an annualized and normalized storm assistance

revenue should be included as an offset to the base amount of storm restoration cost set in

the tracker. Ameren Missouri would not use those revenues as an offset to the base

amount set in the tracker, but would account for such revenue through the tracker as an

offset to the restoration costs incurred by the company from storms in its own territory.304

3.

The amount of storm assistance revenue Ameren Missouri receives can vary

a great deal from year to year. In 2007, 2009, and 2010, the company received no such

income, whereas in 2011, it received $2.6 million.305

4.

Ameren Missouri has no control over such revenue as it depends entirely

upon whether mutual assistance requests are received from some other utility.306

5.

MIEC calculated that the company received $1.6 million in such revenue

during the test year. It proposed to normalize that amount over two years to arrive at its

302

Wakeman Rebuttal, Ex. 31, Page 5, Lines 18-23.

303

Meyer Direct, Ex. 510, Page 12, Lines 19-22.

304

Wakeman Rebuttal, Ex. 31, Page 6, Lines 15-20.

305

Transcript, Pages 1931-1932 and Ex. 76.

306

Wakeman Direct, Ex. 30, Page 9, Lines 13-22.

101

$800,000 offset to revenue requirement for this case.307

6.

Staff took a different approach to normalizing the amount of storm restoration

revenue earned by Ameren Missouri. Staff noted that 2011, which happens to be the test

year, contained an unusually high amount of storm restoration revenue. Staff proposed to

normalize that level of income by averaging the amount of such income the company

received over the five-year period ending July 31, 2012. That normalization resulted in

Staff’s recommendation to include $581,189 as an offset to the company’s revenue

requirement.308

7.

Because this source of revenue is highly variable, Staff’s five-year

normalization provides a more reasonable estimate of likely future revenues than does the

test-year normalization proposed by MIEC, which includes the unusually high revenues

experienced in 2011 without acknowledging the earlier years when no such revenue was

received.

8.

The importance of this issue was diminished when the Commission decided

to implement a two-way tracker for storm costs. Ameren Missouri will require the company

to include these revenues within the tracker. The only question remaining is whether the

$581,189 normalization of that revenue described by Staff should be used to reduce the

base level of storm costs included in the tracker.

9.

Ameren Missouri proposes that the revenue not be used to reduce the base

level of storm costs, and would instead simply credit such revenues against expenses

within the tracker. The Commission finds that to be a reasonable solution that will credit

ratepayers for that revenue without imposing an economic penalty on the company if those

307

Meyer Direct, Ex. 510, Page 13, Lines 9-15.

308

Transcript, Page 1928, Lines 20-25.

102

revenues are not received.

Conclusions of Law:

There are no additional conclusions of law for this issue.

Decision:

Ameren Missouri shall credit storm assistance revenue as an offset to major storm

expenses within the two-way storm cost tracker established in the report and order. Such

revenue shall not be used to reduce the base level of storm costs established within that

tracker.

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