Missouri Public Service Commission v. Union Electric Company, D/B/A Ameren Missouri
WD79406
| Mo. Ct. App. | Dec 6, 2016Background
- Ameren Missouri filed a three-year MEEIA (2013–2015) demand-side program (DSIM) approved by the Missouri PSC via a stipulation; the DSIM included recovery for lost revenues (TD-NSB) and a performance incentive equal to a percentage of net shared benefits (NSB).
- The Commission’s MEEIA implementing rule (4 C.S.R. §240-20.093(1)(F)) requires that a utility "use the same methodology used in its most recently-adopted preferred resource plan (IRP) to calculate its avoided costs."
- Ameren used ‘‘deemed’’ (stale) avoided-cost inputs in its DSIM true-up submissions to EM&V contractors, while its 2014 IRP contained updated avoided-cost inputs (same formula/methodology but different data inputs reflecting market changes).
- Staff filed a complaint alleging Ameren violated §240-20.093(1)(F) by failing to provide EM&V contractors the most recent avoided-cost information for calculating the performance-incentive portion of NSB; Ameren admitted it did not provide the 2014 IRP inputs.
- The Commission granted Staff’s summary determination, holding that "methodology" in the rule includes both the formula and the specific data inputs from the most recently adopted IRP and that Ameren’s approved DSIM was not waived from that rule; Ameren appealed.
Issues
| Issue | Plaintiff's Argument (Staff) | Defendant's Argument (Ameren) | Held |
|---|---|---|---|
| Whether "methodology" in 4 C.S.R. §240-20.093(1)(F) includes data inputs as well as the formula | Methodology includes formula plus the data inputs from the most recently adopted IRP; utilities must use updated IRP inputs when calculating avoided costs for the performance incentive | Methodology means process/formula only; inputs (avoided-cost data) are not part of "methodology," so Ameren complied because formula was unchanged | Court held methodology reasonably includes both the formula and the inputs; utilities must use the most recent IRP data for the DSIM performance-incentive calculation |
| Whether the approved stipulation/DSIM prevented the Commission from requiring updated avoided-cost data | Staff: the stipulation did not waive §240-20.093(1)(F); the performance-incentive (based on NSB) is governed by the rule | Ameren: Table 2.12 and the plan expressly provided that avoided costs would be "deemed" and not updated for the 3-year plan, so the Commission was bound by its approval | Court held the stipulation did not grant a variance from §240-20.093(1)(F); the approved performance-incentive component remained subject to that rule |
| Whether requiring updated avoided-costs is arbitrary or fails to consider plan reliance interests | Staff: updated inputs better align incentives with actual customer savings and statutory goals; prevents shareholder windfalls when market prices fall | Ameren: using later IRP inputs alters the plan approved at a point in time and changes the "rules mid-game," undermining reliance on estimates used to approve the plan | Court found the Commission’s rationale reasonable: updated inputs ensure incentives reflect verifiable savings and align with legislative policy; not arbitrary |
| Whether the Commission rewrote the rule by treating "methodology" to include inputs | Ameren: that is a textual rewrite; dictionary definition and other rule uses show methodology = process/formula only | Commission/majority: practical reading is required—without specifying inputs the methodology is indeterminate; reading is consistent with statute and purpose | Court deferred to Commission expertise and held the interpretation reasonable and supported by the record |
Key Cases Cited
- State ex rel. Pub. Counsel v. Pub. Serv. Comm'n, 397 S.W.3d 441 (Mo. App. W.D. 2013) (upheld MEEIA implementing regulations)
- Office of Pub. Counsel v. Mo. Pub. Serv. Comm'n, 409 S.W.3d 371 (Mo. banc 2013) (standard for reviewing PSC orders; presumption of validity)
- State ex rel. Mobile Home Estates, Inc. v. Pub. Serv. Comm'n of Mo., 921 S.W.2d 5 (Mo. App. W.D. 1996) (agencies have broad regulatory discretion)
- State ex rel. Dyer v. Pub. Serv. Comm'n, 341 S.W.2d 795 (Mo. 1960) (agency discretion and deference on technical matters)
- State ex rel. Praxair, Inc. v. Pub. Serv. Comm'n, 328 S.W.3d 329 (Mo. App. W.D. 2010) (PSC not bound to a single methodology in ensuring just and reasonable rates)