RELEASE: New Missouri law cuts and caps electric rates, enables acceleration of a smarter, more secure energy grid

Published on by Press Releases

Electric rates are falling later this summer for Ameren Missouri customers, thanks to a new law updating century-old policies in the state.

In addition to a rate cut, estimated at around five percent for Ameren Missouri customers, the legislation also will benefit customers by capping rates and accelerating utility investments to modernize Missouri’s electric grid, which benefits customers by making the grid smarter and more secure.

Missouri Senate Bill 564, which was signed into law earlier this month, was widely supported by customers, business organizations, unions and a bipartisan majority of more than 85 percent of the Missouri General Assembly.

“For years our customers have expressed a desire for more stable and predictable energy bills, as well as a modernized electric grid that is smarter and more resilient to outages,” said Michael Moehn, president, Ameren Missouri. “The new law delivers on this important task. We look forward to delivering a plan that will greatly benefit our customers, create jobs, bolster the grid and enable new economic growth in Missouri. We thank the coalition of customers, businesses, community organizations and lawmakers that came together this year to upend the status quo and make energy infrastructure improvement and customer rate stability a reality.”

In addition to rate cuts and caps, the legislation makes possible a comprehensive plan that will accelerate the pace of deploying smart grid technologies throughout the Ameren Missouri service territory. The plan will update the energy delivery system with modern infrastructure that will make it more resilient.

Elements of the new law include:

  • Rate Cut – By updating century-old regulations, the law fosters the quick return of more than $100 million annually in federal tax savings to Ameren Missouri customers, which translates to a more than five percent rate cut for the average customer.
  • Rate Freeze – The bill freezes rate adjustments for Ameren Missouri customers until April 2020.
  • Rate Caps – Over the next five years, the law limits Ameren Missouri rate increases to a 2.85 percent compound annual growth rate, applied to electric rates established April 1, 2017. This unprecedented rate cap, the first in Missouri and the most stringent in the United States, represents an average increase of about half the annual average electric rates have gone up each year over the past decade in Missouri, for investor-owned utilities.
  • Grid Modernization – A $1 billion plan from Ameren Missouri will create jobs in the state of Missouri, bolster grid security and upgrade the energy delivery system with smart technologies. The full plan, detailing improvements over the next five years, is expected to be submitted to the Missouri Public Service Commission (PSC) by early 2019.
  • Solar Energy – The law encourages renewable energy by providing up to $28 million in solar rebates for customers, starting in 2019. The law also calls for Ameren Missouri to allocate $14 million to utility-owned solar by 2023.
  • Economic Development – To drive economic growth, rate incentives were established to support Missouri businesses that expand their operations.

“As advocates for families, small businesses and households, we are pleased that the new law provides for the first rate caps in Missouri and will return more than $100 million to consumers within 90 days of becoming law,” said Chris Ventura, Midwest executive director of the Consumer Energy Alliance, a national advocate for energy consumers. “We look forward to working together with Missouri policymakers to support building the energy infrastructure that not only provides upgraded capabilities but also protects the pocketbooks of people on fixed incomes or living paycheck to paycheck. Nothing is more important to us than ensuring energy consumers – especially those struggling to make ends meet – are treated fairly. We also support provisions of the new law that help grow Missouri’s economy through job creation, as a result of energy grid modernization, and by providing incentives for large energy users who expand their businesses. Business growth helps keep energy costs down for all consumers.”

“The rate cuts and caps signed into law will allow businesses to grow, while the economic development incentives included in SB 564 will further enhance Missouri’s reputation as a low-cost energy state,” said Daniel P. Mehan, president and CEO of the Missouri Chamber of Commerce. “The work done during the 2018 legislative session to make Missouri a better place to create jobs is some of the most productive in the past decade. In particular, the Missouri Chamber of Commerce and Industry is proud to have worked with lawmakers to cut utility bills for Missourians.”

While the law included a 90-day deadline for utilities to pass along savings from the federal tax cuts to customers, Ameren Missouri plans to move even quicker to return more than $100 million to customers and reduce rates, which started with a filing with the PSC made on June 1, within hours of the bill becoming law. Subject to Missouri PSC approval, Ameren Missouri hopes to have this rate cut in place for customers as soon as possible later this summer.

Ameren Missouri has been providing electric and natural gas service for more than 100 years, and the company’s electric rates are among the lowest in the nation. Ameren Missouri’s mission is to power the quality of life for its 1.2 million electric and 130,000 natural gas customers in central and eastern Missouri. The company’s service area covers 64 counties and more than 500 communities, including the greater St. Louis area. For more information, visit Ameren.com/Missouri or follow us at @AmerenMissouri or Facebook.com/AmerenMissouri.

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