Ameren electric customers across Missouri will see their bills go up this summer after a settlement between the utility and consumer advocates was approved by state regulators.
Steve Wills is Ameren Missouri’s senior director of regulatory affairs and said the company is pleased the Public Service Commission approved the settlement, calling it “fair and constructive.”
“We understand that it’s never a good time to raise rates … but we’ve made very significant improvements in our system that will enhance the reliability and the resilience of the system,” Wills said.
Ameren estimates the new prices will result in bills going up $14 per month for the average user. The approved rate increase enables Ameren to collect an additional $335 million dollars annually, which is $91 million less per year than the company initially requested.
Utilities are what’s called “regulated” or “natural” monopolies — in exchange for being the sole provider of utility service in a specified area, the companies are subject to state oversight.
Utilities must ask the Missouri Public Service Commission — the state agency that regulates investor-owned utilities — for approval to increase the prices it charges the public. Ameren filed the rate case in June 2024, which started an 11-month regulatory process.
“We spend a lot of time talking about the various issues and understanding each party’s position and try to find a middle ground that reflects a fair return for the investments that we’ve made to serve customers,” Wills said.
Ameren Missouri initially asked state regulators for permission to raise electricity rates by 15.77% — which would have resulted in an estimated average monthly bill increase of about $17.45.
Utility representatives say the additional revenue is necessary to recoup costs of “major system upgrades” and “cleaner” generation investments.
The new rates are scheduled to take effect June 1.
Michael Sykuta is an economist with the MU Financial Research Institute and said utility price hikes are a reflection of the broader economy.
“We’ve all experienced inflationary pressures in the things that we buy in our household budgets,” he said. “Companies across the board, not just utilities, are facing those same inflationary pressures for the equipment they have to buy, for the salaries they pay, for their other operating expenses.”
John Coffman, an attorney for the Consumers Council of Missouri, a consumer advocacy group that was involved in the settlement negotiations, said he thinks the agreement is fair.
“All the parties felt like they got something valuable out of the deal,” he said. “I mean it’s nothing to celebrate that we have these double digit increases, but we are happy about the way it was applied and some of the other guarantees we have going forward.”
According to the organization, the Consumers Council advocated for elements of the deal relating to low-income bill assistance, community solar power and assurance that Ameren is not allowed to charge customers for costs to mitigate pollution from the Rush Island power plant — which the company was ordered to do by the U.S. Environmental Protection Agency.
Missouri Industrial Energy Consumers, Renew Missouri, AARP and other organizations were also involved in the settlement.
Multiple public hearings were held throughout Ameren Missouri’s electric case. Lindsey Phoenix is an attorney living in Jefferson City who testified before the commission in January, sharing her opinion that a price hike was not justified.
Upon hearing of the settlement Thursday, Phoenix said she was disappointed with the results.
“The issue wasn’t how much of an increase they needed. The issue that everyone was there discussing was that they didn’t need one,” she said.
Phoenix, among other members of the public who testified, stressed the economic pressures many people find themselves in and how utility bill increases compound those challenges.
“I am an attorney, and my spouse is a teacher, and we are living paycheck to paycheck,” Phoenix said.
Ameren’s Wills encourages customers who are feeling squeezed to inquire about energy efficiency programs that could lower their costs.
“For those who are really struggling with the rates at a higher level, please reach out to us because we have energy assistance options available,” he said. “We have opportunities for flexible payments arrangements, budget billing and various sources of grants that we can either provide or connect customers with.”
Ameren provides electric service to much of mid-Missouri and has approximately 1.2 million electric customers in the state. The company also provides gas service for some communities, including Columbia and Jefferson City. The utility is in the middle of an ongoing rate case for gas prices.
Shifting energy industry policies
Missouri utility rate cases are taking place while energy policies on the federal and state level are shifting.
Last month, Missouri Gov. Mike Kehoe signed a bill into law that affords utilities a variety of new financial accounting practices. The legislation includes a policy called “construction work in progress” that enables energy companies to earn revenue on power plants as they build them and before they generate any electricity.
Ameren representatives have said the bill is an important tool that could help them build new power plants, including nuclear, to meet increasing electric demand.
“We’re having to retire older facilities and build new facilities,” Wills said. “I think what some of the legislation did was try to streamline Missouri’s processes a little bit around future generation planning.”
On the federal level, President Donald Trump has signed a variety of executive orders since taking office aimed at prioritizing the fossil fuel industry, including one last month that targets increased coal production.
MU’s Sykuta said the most recent executive order could help extend the life of Missouri’s coal power plants. However, Trump’s attempts to rescind energy funds from the Biden administration’s Inflation Reduction Act could slow down investment in wind and solar as well as upgrades to the transmission grid — ultimately resulting in price increases for customers.
“Consumers pay higher costs when transmission is more congested,” Sykuta said. “A lot of that infrastructure development has been started or planned with the idea of using the IRA funding — and with the IRA funding going away some of that investment is not going to happen.”
Jenn DeRose is a campaign organizer for the Sierra Club’s “Beyond Coal” campaign that aims to get utilities to close coal plants and transition to renewable energy sources like wind and solar.
The Sierra Club was an “intervenor,” or party to the Ameren electric rate case. DeRose said rural Missourians, low-income individuals, and people of color are most likely to face high energy burdens.
DeRose calls the rate case process “very opaque and difficult to understand.” Her role throughout the case was to encourage members of the public to participate.
“The number one thing that anybody can do is advocate,” she said. “Utilities, public service commissioners, they need to know the impacts of their decisions on regular people. They need to know what this looks like, and they need to know that they are responsible for creating solutions.”
The Ameren rate increase comes at a particularly challenging time, DeRose said, as summer cooling needs result in higher monthly bills and the Trump administration just fired the federal staff that administers the Low Income Home Energy Assistance Program.
“LIHEAP is a critical program that helps people pay their heating and cooling bills, and it is essential to keeping people connected to services, but also, more broadly, it’s essential to keeping people in their homes,” DeRose said. “We know that disconnections lead to evictions.”
