Oct 16 - McClatchy-Tribune Regional News - Jeffrey Tomich St. Louis Post-Dispatch

In another sign of the far-reaching impact of the global credit crisis, Missouri's largest electric utility says it's unable to sell commercial paper and has experienced trouble accessing other types of credit.

"These problems in accessing capital are very real," AmerenUE Chief Executive Thomas Voss said in testimony filed with the Missouri Public Service Commission.

AmerenUE, which sells electricity to 1.2 million customers in Missouri, is among the St. Louis area companies that sell commercial paper, a type of short-term debt, to help finance daily expenses. Instead, the utility has relied on more restrictive, expensive bank loans.

The company also raised doubts about the willingness of some lenders to renegotiate a $1.15 billion credit facility that expires in 2010, and said plans to sell long-term debt next year will be more challenging because of the credit crunch.

"Given the current stress that the banks are under, a borrower's credit profile will be scrutinized perhaps more than it has ever been," Ameren-UE said in the testimony.

The filings were made as part of AmerenUE's request to raise electric rates by $251 million. A company spokeswoman, Susan Gallagher, wasn't able to provide further details.

AmerenUE specifically cited its recent difficulty accessing capital to bolster its case for approval of a surcharge that would let the utility more frequently pass through fuel expenses to customers.

AmerenUE's inability to quickly recover fuel expenses hurts its credit rating and makes the company less attractive to investors, the company says. That ultimately leads to higher borrowing costs, which ultimately mean higher rates for customers.

The proposed surcharge, or fuel adjustment clause, has been strongly opposed by consumer advocates who say it would remove the incentive for AmerenUE to wisely manage expenditures on coal and natural gas.

The PSC last year rejected AmerenUE's request to implement a fuel surcharge, saying the utility could offset volatile fuel prices through the sale of electricity to customers outside of its service area.

John Coffman, an attorney for the Consumers Council of Missouri and AARP, said Ameren-UE's current difficulty accessing capital markets doesn't change his position.

"The reason the commission gave last time for rejecting it has not changed," he said. "The idea that economic disruption is greater for them and that they should be allowed to shift their business risk onto consumers is outrageous."

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

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