Ameren Missouri Bets Big on Expensive New Gas

Ameren Missouri, the utility serving much of the state, has announced plans to build a large new natural gas power plant, 2.1 gigawatts, in St. Charles County. The company hasn't released a cost estimate, but a similarly sized gas project in South Carolina recently saw its price tag double, from $2.5 billion to $5 billion. By comparison, a solar-and-battery-storage project of similar size planned in Arkansas is expected to cost $3.5 billion with no state subsidies, making it roughly cost-competitive with what Ameren's gas plant will likely cost.

The bigger issue for customers is how Ameren plans to pay for construction. Under a state law called Senate Bill 4, the utility can ask regulators for permission to use a financing method known as Construction Work In Progress, or CWIP. This would let Ameren raise monthly bills years before the plant is even finished and generating power. Critics, including the Sierra Club, point to independent analysis showing that CWIP tends to raise the total cost of projects rather than save money, despite utility claims of interest savings. It's also unclear how much of the cost will be shouldered by data centers versus regular residential customers.

For Missouri homeowners served by Ameren, this means a possible rate increase tied to a gas plant that won't deliver electricity for years, layered on top of what critics call an already difficult affordability environment for utility customers in the state.