Attorney General's News Release

November 28, 2007

$179,750,000 settlement protects Ameren ratepayers from paying any costs related to Taum Sauk disaster

Jefferson City, Mo. — Ameren’s 1.2 million ratepayers in Missouri won’t have to bear any of the costs related to the Taum Sauk reservoir collapse, under a $179,750,000 settlement with the State of Missouri announced today by Attorney General Jay Nixon. Nixon filed a lawsuit against Ameren last December, asking that the state’s largest utility company be held financially accountable for the Dec. 14, 2005 reservoir breach in Reynolds County.

“This settlement satisfies my requirement for ‘the three Rs,’ which are the demands I have made from the beginning,” Nixon said. “Those are that Ameren’s ratepayers be protected from bearing any of the costs related to the collapse, that the state of Missouri and other injured parties receive adequate recompense for their losses, and that Ameren must rebuild the Taum Sauk reservoir.”

The settlement resolves the lawsuit brought by the Attorney General on behalf of the state of Missouri against Ameren and was filed in Reynolds County Circuit Court this morning. A copy of the settlement can be found online at the Attorney General’s Web site, ago.mo.gov. During the next 30 days, the public is invited to submit any comments on the settlement to the Missouri Department of Natural Resources for consideration by the court, the State of Missouri and Ameren.

Among the provisions included in the settlement are:

• $103 million from Ameren to rebuild Johnson’s Shut-Ins State Park, which was badly damaged in the collapse. This figure includes approximately $51 million in work already completed as of Oct. 31, 2007, as well as $52 million in work yet to be done as of that date;
• A rebuild by Ameren of the upper reservoir that collapsed, so that the existing power plant can generate electricity. The rebuild is estimated to cost at least $350 million;
• $69,240,000 for natural resources damages, that includes:
  • $11,875,000 for Missouri state parks;
  • $6 million for the Department of Conservation;
  • $18 million for the State to connect the Katy Trail between Windsor and Pleasant Hill, subject to appropriation by the Missouri General Assembly;
  • $7 million for tourism and economic development in the area affected by the collapse and the resulting loss of tourism, through a fund controlled by a local non-profit board; and
  • $5 million for education, including $2 million for the Reynolds County School Fund and $3 million for educational enrichment opportunities in Reynolds County through a fund controlled by a local non-profit board that is separate from the board for tourism/economic development.
• $2 million in compensatory damages to the State of Missouri;
• $3.1 million for state response costs to the disaster;
• Protection of nearby Church Mountain, an area that Nixon successfully fought to protect in 2001. The state of Missouri will hold a right of refusal on the property owned by Ameren in the event Ameren decides to sell the Church Mountain area to a third party; and
• Assurances that Ameren will continue to pay at least the same amount in local taxes and fees as it did prior to the collapse, protecting local taxpayers. This amount is expected to be no less than $2.4 million.

The failed upper reservoir was originally built in the early 1960s. Until its collapse, the Taum Sauk reservoir was used to generate electricity for Ameren during peak demand periods, through the pumping of water from a lower reservoir to the upper reservoir that failed and the draining of water back to the lower reservoir. Ameren must undertake the rebuild using modern designs and construction methods approved by the federal government. Nixon said the settlement protects ratepayers from paying any of the costs related to the disaster, including the rebuild, and that either insurance or shareholders must cover those costs.

To ensure that local taxpayers in Reynolds County are protected, Nixon said Ameren will continue to pay all local property taxes and fees at the same level it did before the disaster, even while the power plant is inoperable. Construction of the new upper reservoir will cause the assessed valuation, and resulting local tax payments from Ameren, to rise.

“Ameren is being held accountable for its actions that led to this disaster,” Nixon said. “This settlement will benefit the residents and businesses in the Taum Sauk area, Ameren ratepayers, Missouri taxpayers, and all those who use and enjoy Missouri’s state parks.

“Johnson’s Shut-Ins will never be the same,” Nixon said. “Today, however, we have in place a legal framework to ensure that Ameren restores as much as possible the irreplaceable natural amenities of this unique area and, in some respects, makes the park even better than it was before the disaster.”

Read settlement, pdf format

Inquiries from consumers should be directed to consumer@ago.mo.gov or 1-800-392-8222 (from within Missouri) or 573-751-3321 (outside Missouri).

All media inquiries should be directed to Press Secretary John Fougere.

E-mail      Phone: 573-751-8844         Fax: 573-751-5818