Office of Public Counsel v. Public Service Commission

422 S.W.3d 358, 2013 WL 5614208, 2013 Mo. App. LEXIS 1206
CourtMissouri Court of Appeals
DecidedOctober 15, 2013
DocketNos. WD 75980, WD 76082, WD 76076, WD 76080
StatusPublished
Cited by2 cases

This text of 422 S.W.3d 358 (Office of Public Counsel v. Public Service Commission) is published on Counsel Stack Legal Research, covering Missouri Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Office of Public Counsel v. Public Service Commission, 422 S.W.3d 358, 2013 WL 5614208, 2013 Mo. App. LEXIS 1206 (Mo. Ct. App. 2013).

Opinion

MARK D. PFEIFFER, Judge.

In this appeal, Missouri Industrial Energy Consumers (“MIEC”),1 Consumers [361]*361Council of Missouri (“CCM”),2 AARP,3 and the Office of Public Counsel (“OPC”),4 collectively “Consumers,” challenge the Public Service Commission’s (“PSC”) Report and Order issued December 12, 2012 (“2012 Report and Order”), that approved a rate increase for Union Electric Company, d/b/a Ameren Missouri (“Ameren Missouri”). Specifically, Consumers appeal the decision of the PSC allowing Ameren Missouri to use a Fuel and Purchased Power Adjustment Clause (“FAC”) to automatically recover from customers certain MISO Schedule 26 and 26A transmission charges. We find that the PSC was within its authority in permitting Ameren Missouri to use an FAC to pass on the charges at issue, that it acted reasonably in permitting those costs to be passed on to its customers, and that the record supported the determinations of the PSC. Accordingly, the PSC’s 2012 Report and Order was lawful and reasonable, and we affirm.

Factual and Procedural Background

The PSC is a state agency established by the Missouri legislature to regulate public utilities operating within the state. State ex rel. Praxair, Inc. v. Mo. Pub. Serv. Comm’n, 344 S.W.3d 178, 186 (Mo. banc 2011). Ameren Missouri is a public utility within the meaning of section 386.020(43),5 and an electrical corporation within the meaning of section 386.020(15), subject to the jurisdiction, control, and regulation of the PSC. Ameren Missouri provides retail electric service to approximately 1.2 million retail electric customers in Missouri, including those in the St. Louis metropolitan area.

Ameren Missouri initiated this case, No. ER-2012-0166, on February 3, 2012, by filing with the PSC proposed tariff sheets designed to implement a general rate increase for electrical service, which would increase Ameren Missouri’s annual electric revenues by approximately $375.6 million. By order issued pursuant to section 393.150, on February 6, 2012, the PSC suspended Ameren Missouri’s general rate increase tariff until January 2, 2013; directed that notice of Ameren Missouri’s tariff filing be provided to interested parties and the public; and set the deadline for submission of applications to intervene. Among the parties allowed to intervene were MIEC, CCM, and AARP.

In July and August 2012, the PSC conducted twelve local public hearings at various sites around Ameren Missouri’s service area. An evidentiary hearing was held September 27, 2012, through October 11, 2012. The PSC issued its 2012 Report and Order on December 12, 2012, effective December 22, 2012, rejecting the tariff sheets filed by Ameren Missouri and authorizing Ameren Missouri to file a tariff sufficient to cover an increase in its revenues of approximately $260.2 million.

In addition to the PSC’s approval of a general rate increase, the PSC also approved the inclusion in the FAC of certain [362]*362expenditures that Ameren Missouri remits to the Midcontinent Independent System Operator, Inc. (“MISO”).6 MISO is the Federal Energy Regulatory Commission (“FERC”)-approved regional transmission organization (“RTO”), in which Ameren Missouri participates, with the PSC’s approval.

Through its membership in MISO, Am-eren Missouri has access to a transparent, wholesale energy market where it can acquire power to serve its load and sell power off-system. Network service enables Ameren Missouri to transmit energy acquired from the MISO market, including that injected by Ameren Missouri’s own generators, to its customers. MISO charges Ameren Missouri for the use of its service pursuant to a FERC-approved tariff. Although the charges exist as distinct schedules, they must be paid by Ameren Missouri to use the system to serve load.

The PSC has permitted certain MISO transmission service charges to be included in Factor CPP (Costs of Purchased Power) in Ameren Missouri’s FAC since its inception:

CPP = Costs of purchased power reflected in FERC Account Numbers 555, 565, and 575, excluding MISO administrative fees arising under MISO Schedules 10, 16, 17, and 24, and excluding capacity charges for contracts with terms in excess of one (1) year, incurred to support sales to all Missouri retail customers and Off-System Sales allocated to Missouri retail electric operations. Also included in factor “CPP” are insurance premiums in FERC account Number 924 for replacement power insurance to the extent those premiums are not reflected in base rates. Changes in replacement power insurance premiums from the level reflected in base rates shall increase or decrease purchased power costs. Additionally, costs of purchased power will be reduced by expected replacement power insurance recoveries qualifying as assets under Generally Accepted Accounting Principles.

LF vol. 13, 6233 (excerpt from approved compliance tariff sheets). Consumers challenge the propriety of allowing certain MISO Schedule 26 and 26A charges to flow through the FAC.

As explained by MIEC witness James Dauphinais, MISO Schedule 26 charges are FERC Account 5657 (transmission of electricity by others) expenses incurred by Ameren Missouri under MISO Tariff Schedule 26 (network upgrade charge from transmission expansion plan) for the: (i) long-term transmission service it takes under MISO Tariff Schedule 9 (network integration transmission service) to serve its network load (including its retail load); and (ii) short-term transmission services it takes under MISO Tariff Schedule 7 (firm point-to-point transmission service) and MISO Tariff Schedule 8 (non-firm point-to-point transmission service) to make off-system sales on behalf of its retail customers to entities not located within MISO. Schedule 26 is used by MISO to recover the cost of Baseline Reliability Projects (“BRP”) that are included in the MISO Transmission Expansion Plan (“MTEP”). Revenues collected by MISO under Schedule 26 are distributed to the transmission owners who have constructed the BRPs.

[363]*363MISO Schedule 26A charges are FERC Account 565 expenses incurred by Ameren Missouri under MISO Tariff Schedule 26A (multi-value project usage rate), for the: (i) long-term transmission service it takes under MISO Tariff Schedule 9 to serve its network load (including its retail load); and (ii) short-term transmission services it takes under MISO Tariff Schedule 7 and MISO Tariff Schedule 8 to make off-system sales on behalf of its retail customers to entities not located within MISO. Schedule 26A is used by MISO to recover the cost of Multi-Value Transmission Projects (“MVPs”) that are included in the MTEP. Revenues collected by MISO are then distributed to the transmission owners constructing the MVPs as MISO Schedule 26A revenues.

Consumers agree that MISO transmission charges associated with the short-term transmission service necessary to support power purchases or off-system sales are incremental costs directly related to Ameren Missouri’s fuel and purchased power cost and are properly recoverable through the FAC.

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422 S.W.3d 358, 2013 WL 5614208, 2013 Mo. App. LEXIS 1206, Counsel Stack Legal Research, https://law.counselstack.com/opinion/office-of-public-counsel-v-public-service-commission-moctapp-2013.