Aug. 29--The staff of the Missouri Public Service Commission is urging regulators to deny most of AmerenUE's proposed $251 million increase.

The staff, a group of lawyers, accountants and engineers who advise the five-member commission, reviewed AmerenUE's April rate proposal and concluded the utility should be allowed to increase rates by $51.4 million. The recommendation was made in a filing late Thursday.

St. Louis-based AmerenUE, with 1.2 million Missouri electric customers, claims it needs increased revenue to keep pace with rising fuel costs and increased spending on poles and wire to make service more reliable.

The PSC staff recommended allowing AmerenUE to earn on a return on equity, or profit, of 9.5 percent -- less than the 10.9 percent return on equity proposed by the utility. While the difference might seem small, it represents a gulf of $70 million that would potentially flow to Ameren's bottom line.

The PSC staff isn't the only group reviewing Ameren's rates. Other groups are also urging the PSC to deny AmerenUE some of the increase it's seeking.

Among them is the Missouri Industrial Energy Consumers, an alliance of AmerenUE's biggest commercial and industrial customers including Anheuser-Busch Cos. and Boeing Co. The MIEC didn't review all aspects of Ameren's proposal, but called the utility's rate proposal "significantly overstated."

A series of 14 public hearings will be held across AmerenUE's service area beginning Sept. 8 to let customers have a say on the proposed increase. Formal hearings in Jefferson City are scheduled for November.

The PSC has until March to rule on AmerenUE's request, so any change in rates probably wouldn't show up on bills until early 2009.

AmerenUE's last electric-rate increase of $43 million was approved by the PSC in June 2007. That increase was the first for the utility in 20 years, but substantially less than the $361 million the utility initially sought.

Ameren's Illinois utilities are seeking a $207 million increase in electric and natural-gas rates. A ruling in that case is expected next month.

jtomich@post-dispatch.com -- 314-340-8320

-----

To see more of the St. Louis Post-Dispatch, or to subscribe to the newspaper, go to http://www.stltoday.com.

Copyright (c) 2008, St. Louis Post-Dispatch

Distributed by McClatchy-Tribune Information Services.

For reprints, email tmsreprints@permissionsgroup.com, call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA.

NYSE:AEE, NYSE:BUD, NYSE:BA,