AmerenUE customers will see their electric bills climb about nine dollars a month, beginning sometime next month.

The Public Service Commission has approved a $226 million rate increase for AmerenUE. PSC Chairman Robert Clayton understands this won’t be received as good news by consumers struggling under a lingering recession.

“Any rate increase is unwelcome, there’s no question about that,” Clayton tells the Missourinet, “and I can’t speak for the majority that voted for the order in this case, but the local public hearings definitely brought out serious concerns people have in this state about the lack of jobs, about needing economic opportunity. There were people that were unemployed, underemployed (at the hearings) and this a particularly bad time to be dealing with rate increases.”

The PSC approved the rate hike on a 4-to-1 vote. Clayton cast the lone “No” vote. He says he had concerns about the case Ameren brought before the PSC. Clayton hadn’t settled on an amount he would vote for, but favored a rate hike closer to that recommended by the staff: around $165 million.

The PSC rejected an agreement that would have cut the electric rate paid by the Noranda Aluminum Holding Corporation of Franklin, Tenn. which operates a smelter in New Madrid. Noranda is AmerenUE’s largest customer, the only customer listed in the Large Transmission Service class. When operating at full production, the smelter in southeast Missouri pays approximately $140 million a year for electricity, according to the order filed by the PSC. PSC staff and Ameren didn’t sign the agreement, but didn’t oppose it.

AmerenUE had requested a rate increase just over $400 million to offset the higher costs in fuel Ameren uses to generate electricity at its power plants as well as investments made in new infrastructure. The PSC reduced AmerenUE’s return on equity to 10.1%, down from the 10.6% ROE awarded in the utility’s last rate case.

The case settlement sets aside $1 million for a new pilot program to assist the poor with their electric bills. The program should begin by August.

AmerenUE provides electric service to more than one million customers in Missouri.

AUDIO: Brent Martin interviews PSC Chairman Robert Clayton on AmerenUE rate case [5 min MP3]