Everyone saw it coming.
Friday’s extreme storms that struck Missouri and Illinois hit exactly one day before Hurricane season officially started June 1.
Yet the Missouri-based Ameren Corp., serving 2.4 million customers, has struggled to restore power in St. Louis, Missouri where 95,000 customers lost power.
Despite Ameren dispatching 2,400 crew workers from five states, re-energizing nine substations, and repairing more than 175 utility poles -- 35,000 Ameren customers were still without power as of late Monday.
"More than a hundred large poles supporting major sub-transmission lines were taken down in the tornado path.These poles must be repaired first to bring power back into nine substations, each of which supply power to tens of thousands of customers," explains Ameren spokeswoman Geralynn Lord. "Then work can begin on the distribution system which branches out into the neighborhoods to restore service at the residential household level."
Adding insult to injury is a tough financial and political climate which may limit intensified infrastructure upgrades in Missouri.
The day of the storms, Ameren CEO Thomas Voss told St. Louis Business Journal that the utility’s future infrastructure improvement plans are hampered due to an inability to recoup its investment until two-to-four years after the fact.
This past May, legislators blocked the Infrastructure Strengthening and Regulatory Streamlining Act which would have changed the Missouri electric regulatory framework. That way Ameren Missouri could recoup its investments on infrastructure more quickly through rate cases. That same legislation would have also allowed Ameren to spend $1 billion in infrastructure upgrades in Missouri, Voss noted.
Ameren Missouri invests approximately $600 million per year in maintenance and repairs of the aging infrastructure to ensure safe and reliable service to its customers and to meet environmental regulations.The utility’s reliability is currently in the top quartile in the industry and Ameren will continue to make investments. But efforts will certainly be complicated by external forces.
Ameren posted a net loss of $143 million on $1.48 billion of revenue in the first quarter of 2013. In 2012, the utility lost $974 million on revenue of $6.83 billion. And in 2011, Ameren, which operates in Missouri and Illinois, laid off about 500 employees.
Conditions for Ameren Illinois are much better and the utility has planned to invest $1.1 billion in the next five years as a part of the Illinois Rivers project to construct high-voltage transmission lines throughout Illinois. Ameren Illinois will also doll out $643 million from 2012 to 2021 to modernize its electric infrastructure and $330 million to improve its natural gas infrastructure, pending Ill. Gov. Pat Quinn’s signing of the Natural Gas Consumer, Safety and Reliability Act.
So what is Ameren Missouri to do?
“Currently in Missouri, it takes about two to four years from the start of construction for Ameren to begin to recoup its infrastructure investments through rate increases,” the St. Louis Business Journal reported. “So they nearly always lose money on improvements in the state due to depreciation."
In addition to hardening the grid from storms, the “infrastructure will be repaired as it wears out in Missouri,” CEO Voss told the Journal. “Missouri’s process for approving utilities’ increases in rates hasn’t changed in 100 years.”
As of Tuesday morning, 14,000 Ameren customers were still in the dark.
