The Missouri Public Service Commission approved new rates for Ameren Missouri that allow for about $166.5 million in refunds due to federal tax reform.
The July 5 order comes about a week after the Ameren Corp. subsidiary, known legally as Union Electric Co., reached a stipulation and agreement with commission staff, the Missouri Office of Public Counsel, and three consumer groups.
The order allows the utility, which supplies about 1.2 million customers in Missouri, to lower rates effective Aug. 1 to reflect lower corporate income tax rates set by legislation signed into law in late 2017 by President Donald Trump. The tax reform law lowered the corporate income tax rate to 21% from 35%. The commission action also follows a new state law adopted June 1 that reformed utility ratemaking and required the agency to issue a one-time rate reduction within 90 days of the law taking effect.
The stipulation and agreement includes a method for allocating the $166.5 million, equal to a 6.08% decrease, among seven of Ameren Missouri's rate classes. Ameren Missouri will also have to record a regulatory liability, which equates to the product of the retail revenues it generates from Jan. 1 to July 31 of this year and 3.38%. According to the stipulation, the regulatory liability would flow back to customers through an amortization in rates, which Ameren Missouri will set in its next general rate case.
Ameren Corp. executives during their fourth-quarter 2017 earnings call highlighted the new state law, known previously as Senate Bill 564, because it also eases the regulatory review process for utility ratemaking and provided cost recovery mechanism for utilities to recover grid modernization costs.
In 2017, Ameren Corp. recorded a noncash charge of $154 million mainly from a re-evaluation of deferred taxes related to federal tax reform. (Missouri PSC Docket ER-2018-0362)