FERC: AmerenUE could have prevented Taum Sauk collapse

ST. LOUIS, Mo. -- AmerenUE Corporation will pay the single largest fine of its kind ever levied by the Federal Energy Regulatory Commission (FERC), according to federal officials.

Announced Monday, AmerenUE has agreed to pay a total of $15 million in fines for the Taum Sauk reservoir collapse which occurred on Dec. 14 and released more than a billion gallons of water on the Johnson Shut-ins State Park.

AmerenUE violated a number of federal regulations at the hydroelectric plant before it overflowed and was aware of critical problems at the plant for months prior to the breach, said FERC Chairman Joseph Kelliher, and despite the dangers did not fix or close down the plant.

"The bottom line is that this incident could have been avoided," said Kelliher. "I guess we're just fortunate that no one did die."

Although there were no deaths, the home of the Johnson Shut-ins Park supervisor was swept away in the flood and all five members of his family were injured. Because of the time of year, the campgrounds at the popular summer vacation spot were empty.

However, in the agreement between FERC and AmerenUE, the company does not admit or deny any wrongdoing. AmerenUE also agreed that it will create a new position of chief dam safety engineer who will be responsible for any dam safety at all of AmerenUE's hydroelectric plants.

"We continue to focus on ensuring that something like this never happens again," Rainwater said in the statement.

Ameren spokesman Tim Fox said neither Rainwater nor Chief Operating Officer Thomas Voss was available for comment Monday. Ameren's head attorney Steven Sullivan signed the settlement with FERC Aug. 31.

The settlement requires Ameren to pay $10 million of the fine within 10 days. Ameren must put an additional $5 million into an escrow fund and spend the money on improvements to the area around the Taum Sauk reservoir, according to the settlement.

The $5 million could be spent on a number of improvements, such as improving local emergency response teams, Kelliher said.

Ameren has already spent more than $44 million on clean-up, covering property damage claims, business claims and costs for the state, said Tim Fox, spokesman for the utility. The company anticipates spending another $19 to $39 million, he said, not including the $15 million announced Monday.

Most of those costs will be covered by insurance policies, and $10 million of the federal fines will be taken from earnings, Fox said. He was unsure if the utility would seek to include the $5 million for community improvements in the formula for setting rates.

Not surprisingly to some, AmerenUE is seeking a rate hike for its electric customers in Missouri.

The agreement with FERC will have no bearing on an agreement currently being negotiated between Missouri Attorney General Jay Nixon, the Missouri Department of Natural Resources and AmerenUE. Gov. Matt Blunt's office has already issued a statement emphasizing the agreement with FERC will have no bearing on an agreement with the state and that "it doesn't even begin to address the damages and environmental harm caused to the state of Missouri by the breach."

Taum Sauk superintendent Richard Cooper reported the September overtopping in an e-mail to other managers two days later. He said the reservoir overflowed because water gauges were broken, and the situation could cause the mountaintop basin to collapse.

FERC's investigation showed Ameren had all the necessary supplies and designs to fix the gauges three weeks before the collapse. Instead, the company scheduled the repairs to be done during a scheduled plant shutdown during the spring of 2006.

Messages show Cooper considered cost concerns when it came to repairs at Taum Sauk. Even the temporary fix of lowering the water level by 1 foot would crimp generation capacity and profits at the plant.

Additionally, FERC inspectors visited the reservoir annually and deemed the facility safe in August 2005.

The Taum Sauk Reservoir is a 1.5 billion gallon reservoir that covers 50 acres in Reynolds County and feeds a 440-megawatt pump storage hydroelectric plant.

There are two reservoirs, an upper and lower, that run the plant. The lower reservoir covers 300 acres on the Black River and is pumped into the upper reservoir at night when electrical costs are low. That water is then release from the upper reservoir to produce electricity to supply peak power needs during the day.

At approximately 5:20 a.m. Wednesday, Dec. 14, the upper reservoir dike failed, resulting in the release of the upper reservoir. The flow from the breach passed into the east fork of Black River through Johnson Shut-ins State Park and Campground Area before returning to the lower reservoir area.

The Associated Press contributed to this report.

Sacha Champion may be reached via e-mail at schampion@dailystatesman.com.