Union Electric

Equity Returns: ‘Allowed’ vs. Earned

Understanding how PUC rate case findings differ from a utility’s financial reports.


(November 2015) Setting an allowed return on equity has consistently proven to be the most contentious and subjective part of a rate case proceeding.

Missouri PSC Approves Modernization Investments

In awarding an electric utility more than $260 million in rate relief, Missouri Public Service Commission explained that the utility, Union Electric dba Ameren Missouri, had demonstrated that its earnings had been deteriorating and that absent additional revenues it would be unable to maintain its system or invest in badly needed facility expansions and improvements. It approved a rate of return on equity of 9.8 percent as opposed to the 10.50-percent level suggested by the company.