FERC approves rate treatment for new Ameren transmission projects

Source: Ameren Corporation

Ameren Corporation announced the Federal Energy Regulatory Commission (FERC) has approved rate treatments filed on behalf of Ameren's newly formed transmission company, Ameren Transmission Company (ATX), and Ameren's utility operating companies—Ameren Illinois and Ameren Missouri. 

The FERC granted the Ameren companies pre-approval of certain rate treatments for a significant portion of their proposed initial portfolio of transmission projects, the Grand Rivers Phase 1 projects. The included projects are specifically the Illinois Rivers and the Big Muddy River Projects. This collection of high voltage transmission projects in Missouri and Illinois represents a combined investment opportunity of over $1 billion. 

"We appreciate FERC's commitment to the development of the transmission system in our region and nation. The rate treatments approved by the FERC today provide the financial structure required for ATX to move forward with strengthening that system," says ATX Chairman, President and Chief Executive Officer Maureen Borkowski. 

The 331-mile, 345,000-volt Illinois Rivers Project would extend from northeast Missouri to the Mississippi River and across north central Illinois to the Indiana border. The 345,000-volt, 185-mile Big Muddy River Project will have as its hub Ameren Energy Resources' Grand Tower Plant and consist of four line segments in southern Illinois, with one segment also crossing the Mississippi River and into southern Missouri. 

Final approval of these projects is subject to their inclusion in the regional system plan of the Midwest Independent Transmission System Operator, Inc., (Midwest ISO). The regional transmission organization serves a multi-state region, including the service territories of Ameren's utilities. 

Formed in August 2010, ATX will invest in electric transmission infrastructure to expand Ameren's already robust transmission system of more than 7,400 circuit miles of high-voltage transmission lines in Missouri and Illinois.
 
This new structure would support Ameren's integrated transmission system, which covers 64,000 square miles in Illinois and Missouri. While Ameren's regulated local electric utilities will continue to own and invest in existing transmission facilities and related new assets, ATX will invest in, and own, new major transmission projects. 

ATX's transmission projects will be built initially within Illinois and Missouri, with the potential for expanding to other areas in the future. The company has identified more than $3 billion of transmission investment opportunities that could be completed in the two states over the next 10 to 15 years. 

"With these new transmission lines, customers will have increased reliability and access to more efficient energy markets," Borkowski added. "New transmission development will also help Ameren pursue its environmental goals by supporting the integration of renewable resources to meet renewable portfolio standards both in Illinois and Missouri." 

In its ruling today, the FERC approved the following rate mechanisms: 

• Full recovery of financing costs associated with construction work in progress; 

• Recovery of prudently incurred costs in developing project facilities that might later be abandoned due to issues outside the company's control; 

• Use of a hypothetical capital structure reflecting the capital structure of the Ameren Illinois Company as of Dec. 31, 2009, which would afford ATX a capital structure that resembles that of a utility company; and 

• Permission to allow ATX to recover operating and maintenance costs incurred in the early development stages of the projects. 

The transmission rates of ATX would be regulated by the FERC under the Midwest ISO tariff. 

With assets of approximately $23 billion, Ameren companies serve approximately 2.4 million electric customers and almost one million natural gas customers in a 64,000-square-mile area of Missouri and Illinois.



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