Ameren, which survived the bad press following the Taum Sauk disaster, is now talking bankruptcy sending its stock into a nose dive.
Ameren supplies power for almost all of Illinois outside of Chicago and more than half of populated Missouri. Its stock had been outperforming the S&P500 before the December 14 Taum Sauk disaster.
At issue is a desire by the company to increase rates in Illinois by 25 to 30 percent.
This is corporate gamesmanship and why Ameren must be watched carefully in how it handles the Taum Sauk disaster. They’re now setting the stage to wriggle their way out of responsibility for the disaster which promises to cost millions more than anybody has yet publicized.
The Herald Review notes;
Scott A. Cisel, president of Illinois energy delivery for Ameren, says the company knows a price increase of this magnitude will hit families and businesses hard. He says Ameren wants to work with state lawmakers to phase in the price hike over maybe five years, but the legislation to make that happen would need to finished this year, and time is running out.
He said credit rating agencies want a deal with lawmakers “within months” or they threaten to further lower AmerenIP, AmerenCIPS and AmerenCILCO’s credit ratings, already hovering just above junk status. That would dramatically drive up the cost of borrowing money for essential operations and could ultimately threaten the companies with bankruptcy.
“We don’t plan for that; there is no strategic plan for bankruptcy,” Cisel told the Herald & Review editorial board Monday. “But, in the worse case, that could be the fallout.”
Ameren paints grim power picture: Says it must be compensated fairly for delivering electricity or face severe financial problems
January 30, 2006
Herald & Review