The Missouri Public Service Commission (PSC) has approved an experimental alternative regulation plan for Union Electric Co., the largest regulated electric utility in the state. The new plan is part of a stipulation and agreement that includes a $30-million one-time customer refund and a $30-million annual rate reduction. The experiment (em scheduled to run between July 1, 1995, and June 30, 1998 (em involves a sharing of company earnings between ratepayers and shareholders. The company would retain all earnings up to and including a 12.61-percent return on equity (ROE) as well as 50 percent of additional earnings, up to a 14-percent ROE. Shareholders would receive any earnings above a 14-percent ROE. The utility also agreed to a moratorium on rate requests unless earnings fall below 10 percent. At the urging of its large industrial and small business customers, the utility further agreed to conduct a new class cost-of-service study that will form the basis for a review of class cost-revenue allocations and rate design. Re Union Electric Co., Case No. ER-95-411, Aug. 1, 1995 (Mo.P.S.C.).
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