Pending legislation in both houses of the General Assembly will allow Ameren to make hundreds of millions of dollars of upgrades to its infrastructure over the next 10 years, but it will come with a price to customers.
The infrastructure upgrades proposed by Ameren have been presented to the General Assembly under the title of the 21st Century Grid Modernization and Security Act.
Ameren’s Vice President of External Affairs and Communications Warren Wood, said the act is originally designed for 10 years, but Ameren is hoping if its plan is successful, it can be expanded in the future.
“We (Ameren) have an aging infrastructure in Missouri,” Wood said. “Just like the state, a lot of our stuff, needs replacement. And, although it may be serving us well now, sooner or later, we will have to replace it.”
To fund these replacements, the plan calls for fluctuating rate increases to end and be replaced with a steady 3.5 percent annual increase for at least 10 years.
Wood referenced the crumbling roads and bridges in Missouri stating the current gas tax was put into place in 1924 to raise continued funds for upkeep and upgrades. Today, with the list of projects getting longer and more expensive, the tax monies that used to supply repairs no longer meet the increasing needs.
“The profit gaps are the same for Ameren,” Wood said. “Our regulations were put into place in 1913. Eventually, there will be a break between what customers expect and what we can provide. We are making progress on this now, but it will only get worse.”
Wood also cites current economic conditions, advances in technology, more energy-efficient programs and appliances all as factors in lost revenue for the power supplier.
Under current regulations, investments in infrastructure are not fully included in rates and result in permanent losses for Ameren.
When asked if there was one main focus area for the upgrades, Wood said it would be at the substation level, but all areas of the grid need improvements.
The 10-year infrastructure upgrade plan calls for spending hundreds of millions of dollars each year on upgrades that would in turn generate jobs.
“We estimate every $100 million we spend, will create about 1,700 jobs,” Wood explained. “Now, factor that over 10 years.”
Ameren Plan
Some key points of the modernization act are:
• Modernization of electrical grid to prevent some outages and enable faster restoration.
• Enhance cyber and physical security to better protect customer data and critical infrastructure.
• Transition to cleaner and more diverse mix of energy resources.
• New energy management tools and technologies.
• Take advantage of low-interest rates to minimize cost of system enhancements.
• Create and help retain thousands of jobs.
• Position Missouri for economic growth in the future.
