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Good results for Ameren might shrink size of rate proposal
February 19, 2010, St. Louis — Ameren Corp.'s fourth-quarter earnings powered up by 39 percent in year-end results announced Thursday that also saw full-year earnings from its Illinois utilities surge 150 percent as rate increases kicked in.
by Tony Reid, The Decatur Herald & Review Now Ameren's management is looking to boost profit levels still further with another delivery rate hike request for electricity and natural gas worth $130 million to its Illinois utilities which are AmerenIP, AmerenCIPS and AmerenCILCO. Ameren also wants millions more in revenue to cover other costs and is seeking that money through additional rate requests. The last rate hike it received, which lifted those Illinois utility earnings to $127 million in 2009, took effect in October 2008. An administrative law judge working with the Illinois Commerce Commission, the regulators of electricity and gas delivery rates, is due to rule on the $130 million request on Thursday. Then it will up to the ICC commissioners to make the final decision, which is expected in late April. But addressing industry analysts Thursday, Ameren's president and chief executive officer, Thomas R. Voss, said the company was facing some significant opposition in its plans to make more money. The ICC professional staff, who reviewed the utilities' rate request, had recommended a raise of just $46 million instead. Voss also said plans for a rate hike in Ameren's home state of Missouri were running into strong opposition as well. "Parties in both states have filed very aggressive positions in a number of areas, including return on equity, depreciation and certain operating expenses," Voss said. "These aggressive recommendations are not consistent with sound, long-term energy policy and would result in our need to reduce our level of investment in energy infrastructure and operations." Ameren has warned that the reliability and efficiency of the power delivery network depends on it having the money to invest in adequate maintenance and improvements. Recapping the corporation's latest earnings in a conference call with power industry analysts, Voss said fourth-quarter net income came in at $79 million or 34 cents per share, compared to $57 million or 27 cents a share at this time in 2008. Net income for the year was $612 million or $2.78 per share, compared to $605 million and $2.88 per share achieved in 2008. But the real bright spot was the Illinois regulated utility results for the whole year, which leapt from $51 million in 2008 to $127 million in 2009. Ameren said the money surge was due to the rate increase that hit in October 2008, along with lower operations and maintenance expenses. Ameren rewarded shareholders with a fourth quarter dividend of 38.5 cents per share. The company expects its 2010 earnings will come in between $2.20 and $2.60 per share, reflecting a still-sour economy and decreased demand. But however the numbers get crunched, Ameren's critics claim the corporation is generating plenty of profit and doesn't need to dig any deeper into consumers' pockets. "Ameren pleads poverty on Main Street but, to Wall Street, it tells the truth, which is the fact it is doing very well," said David Kolata, executive director of the Citizens Utility Board public watchdog group. "Their Illinois regulated utility income is way up because of the rate increases they have unfortunately won previously, and I think it all certainly shows there is just no need for another massive rate increase. We are doing everything we can to stop it." Ameren claims that it does feel consumers' pain and has made sacrifices of its own, laying off workers, slashing expenditures and freezing management salaries to save money. Ameren Corp shares finished Thursday up 24 cents at $25.64. treid@herald-review.com|421-7977 |