AmerenUE Requests Increase in Electric Rates
ST. LOUIS, (SLFP.com), April 6, 2008 - AmerenUE has filed a request for a 12.1 percent electric rate increase with the Missouri Public Service Commission (MoPSC). The increase would allow the company to continue systemwide reliability improvements for its customers and cover increases in its costs for fuel, transportation and materials essential to generating and delivering electricity.
The request would provide a total of $251 million annually in additional revenue to be used throughout the company's 24,000-square-mile service territory. The MoPSC Staff will review all of UE's costs, and the public will have opportunities for comment during the process.
The requested increase would mean less than $9 more per month for the average household -- or less than 30 cents per day. Each household's increase would vary according to the amount of electricity used.
In a release, Thomas R. Voss, AmerenUE president and chief executive officer, said, "Specifically, this increase will enable us to put vulnerable power lines underground, trim more trees away from lines, and increase inspections and repairs of power lines and poles. Fully 70 percent of the requested increase will go directly into projects at our generating plants, for fuel for those plants and for improvements in our delivery system. The rest provides indirect support to these critical investments.
"Today UE -- like our customers -- faces dramatically higher costs for construction materials and for equipment, such as transformers. The cost to buy and transport coal -- which represents more than 20 percent of UE's total costs -- has increased by 33 percent over the past two years."
In addition, UE's cost of maintaining the electric delivery system infrastructure has also risen significantly. For example, since 2004, the cost of pole transformers is up approximately 70 percent, wooden utility poles are up about 40 percent, underground aluminum wire is up about 30 percent and copper wire is up about 100 percent.
"We do not request this increase lightly because we realize our customers are facing rising costs in other areas," said Voss. "However, UE's existing rates are insufficient to recover current costs and permit UE to earn a reasonable return on its investments. Without a reasonable return, we cannot economically raise the money needed to continue to improve our system."
Voss added that the company has employed a range of initiatives to carefully manage its resources and keep electric price increases to a minimum. In fact, except for a 2 percent increase in 2007, UE has not had an increase in its rates for more than 20 years and has managed to keep prices for customers almost 40 percent below the national average.
Today, UE's customers enjoy some of the lowest electric rates in the nation -- lower than in Cincinnati, Indianapolis and Denver, as well as Kansas City and Springfield, Mo. Through the company's cost control efforts, the rates UE customers pay are lower today than they were 20 years ago. Even with this increase, UE electric rates would still be lower than those charged by other Midwest and Missouri utilities.
Consumer Debt: Storm Clouds on the Horizon?
ST. LOUIS, (SLFP.com), April 6, 2008 - Credit cards and payday loans can provide short-term convenience for some people, but consumers' shift toward greater debt could have a long-term, negative impact on the U.S. economy.
That's one point emphasized by research analyst Kristie M. Engemann and economist Michael T. Owyang in the April issue of The Regional Economist, the quarterly journal of business and economic issues published by the Federal Reserve Bank of St. Louis.
The 2004 Survey of Consumer Finances (SCF) showed that the percentage of families holding debt rose from more than 72 percent in 1989 to just over 76 percent in 2004. The median value of the debt more than doubled during that time, from $22,000 to more than $55,000.
Engemann and Owyang noted that 56 percent of American families in 1989 owned at least one credit card. By 2004, that figure jumped to almost 75 percent. The authors' analysis shows that a higher percentage of single people and renters now have a credit card, as do workers with less job seniority, lower incomes and unskilled jobs. They also quoted statistics from the FDIC that showed that the total dollar amount of credit card loans and loans that are 90-days delinquent each tripled between 1992 and 2006.
In addition, the analysis indicates that payday loans have become an increasingly common form of short-term debt, especially among lower-income households. While payday loans are designed to lend small amounts of money for a short time (usually, about two weeks), one report indicates 90 percent of lenders' revenue comes from borrowers who have five or more loans per year, not one-time borrowers.
The key question posed by Engemann and Owyang is: Does this new behavior have detrimental long-term effects? They cited one economic study that said between 1980 and 2005, the amount of revolving debt per household -- especially credit card debt -- coincided with an increase in personal bankruptcy filings.
Another study found that payday loan applicants in Texas were six times more likely to file for bankruptcy between January 2001 and June 2005 than the general population of the Lone Star State.
"This shift toward more debt appears to have long-term ramifications for the U.S. economy," wrote Engemann and Owyang, "as evidenced by the growing number of personal bankruptcies over recent decades."
Buildings and Landmarks Lit Orange to Promote Work Zone Awareness Week
ST. LOUIS, (SLFP.com), April 6, 2008 - As highway construction again gears up for the year, MoDOT is working to prevent work zone accidents by reminding motorists, "Don't Barrel Through Work Zones." Billboard and radio advertising throughout the state will carry that message through the construction season.
MoDOT is also sponsoring Operation Orange for the second year to increase work zone awareness and honor fallen workers by lighting state landmarks orange during Work Zone Awareness Week, April 7-11. In addition to MoDOT buildings statewide, other facilities that will be lit orange include the St. Louis Science Center Planetarium, Busch Stadium, the St. Louis Zoo, the Boone County Courthouse, the Shelter Insurance Gardens' fountain in Columbia, the Emerson Bridge in Cape Girardeau, Hammons Field in Springfield and the Branson Landing.
Work zones will be all over the state again this year as MoDOT continues its Better Roads, Brighter Future initiative. The plan calls for improvements on 5,600 more miles of major roadways by 2011 and will bring 85 percent of Missouri's roadways up to good condition.
The Better Roads, Brighter Future program targets highways carrying 80 percent of all traffic on the state highway system-that's 103 million miles traveled a day. When the program is complete at the end of 2011, the improved roads will prevent approximately 85 disabling injuries and save 10 lives every year.
Beginning this year, crews will also be working hard on the Interstate 64 construction project in St. Louis, as well as the kcICON project to improve Interstate 29 and Interstate 35 in north Kansas City, including a new Christopher S. Bond Bridge. Work will also begin on the Safe and Sound Bridge Improvement Program, which will improve 800 bridges over the next five years.
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