Settlement Paves Way for Rebuilding Taum Sauk

By Jeffrey Tomich and Virginia Young, St. Louis Post-Dispatch

Nov. 29–Ameren Corp. agreed to a $177 million settlement of a lawsuit by Missouri Attorney General Jay Nixon over the 2005 Taum Sauk disaster, paving the way for the utility to rebuild the reservoir atop Proffitt Mountain.

Federal regulators have already approved Ameren’s rebuilding plans, and the utility has hired contractors and a design firm. Until now, though, work has been slowed by the lawsuit and related liability claims by the state.

“At long last we’ve gotten a settlement with the state agencies,” Thomas Voss, Ameren’s chief operating officer, said at a news conference on Wednesday. “We now can concentrate on rebuilding.”

St. Louis-based Ameren has good reason to want to rebuild quickly. Not having the Taum Sauk hydroelectric plant in Reynolds County available this year will cost an estimated $15 million in profit, excluding taxes. And timing is crucial, too. Taum Sauk’s 50-year operating license expires in mid-2010, and some observers say it will be easier for Ameren to renew the license if the plant is up and running.

The Taum Sauk plant has been idle since Dec. 14, 2005, when a 650-foot section of the wall encircling the giant, kidney-shaped upper reservoir collapsed, releasing more than a billion gallons of water that scoured the mountainside and Johnson’s Shut-Ins State Park and injured the family of the park superintendent.

A federal investigation showed the collapse was triggered when water flowed over the top of the reservoir and eroded a rockfill dam. Water-level sensors that were supposed to prevent the reservoir from overflowing had been moved high enough to render them ineffective.

Ameren paid $15 million in penalties under a settlement with the Federal Energy Regulatory Commission in October 2006. The company also settled for an undisclosed sum with park superintendent Jerry Toops, whose family was swept away in the floodwater.

The lawsuit filed by Nixon last December accused the utility of delaying repairs even though it knew the water-monitoring systems weren’t working. The attorney general, however, acknowledged that there was not evidence to pursue criminal charges against the utility.

On Wednesday, Nixon said the settlement achieved his goal: Protecting Ameren customers from costs associated with the collapse, compensating the state for damages and requiring that the utility rebuild the reservoir — a significant part of the tax base for rural Reynolds County.

The settlement filed Wednesday in Reynolds County Circuit Court also was signed by the Missouri Conservation Commission and state Department of Natural Resources. It still needs court approval.

Terms call for most of the $177 million to be spent cleaning up Johnson’s Shut-Ins and the Black River, including $51 million that’s already been spent. Another $18 million will go toward extending the Katy Trail — a 225-mile biking and hiking path that traverses most of the state.

Ameren expects insurance to cover almost all the settlement costs as well as the cost of rebuilding the reservoir. The company is prohibited in the settlement from recovering any rebuilding costs from ratepayers.

At a press conference at company headquarters Wednesday, officials displayed a model of the new reservoir, estimated to cost $350 million, and a photo of the construction site. The project is expected to be done in fall 2009.

The new structure will be made entirely of concrete, not pieces of rock from the mountain used in the original. It will include a spillway and a video monitoring system to ensure there isn’t a repeat of the collapse, said Mark Birk, AmerenUE’s vice president of power supply.

Despite Ameren’s past failure and damage to Johnson’s Shut-Ins and the Black River, many Reynolds County residents have been eager for assurances that the Taum Sauk reservoir would be rebuilt because it’s a significant source of property taxes.

That’s especially true for Earlene Fox, superintendent of the tiny Lesterville School. “It gives us tremendous certainty,” she said Wednesday. “It’s wonderful news.”

The school, with about 200 students from kindergarten to 12th grade, received 53 percent of its total tax revenue from Ameren’s Taum Sauk plant last year.

Sen. Kevin Engler, R-Farmington, said the settlement falls short because it doesn’t aid hard-hit businesses in neighboring Iron County, who rely on Black River tourism.

“The people who were directly affected — the hotels, the campgrounds, the restaurants — got nothing out of it,” Engler said. “Half of them are for sale because they’re not making it.”

Environmental groups and conservationists also were disappointed. They’d pushed hard for a guarantee that the utility wouldn’t pursue a similar pumped-storage hydroelectric plant on nearby Church Mountain, which is owned by the utility, said Dan Sherburne, research director for the Missouri Coalition for the Environment.

“They apparently caved in and sold out to Ameren,” said Susan Flader, past president of the Missouri Parks Association.

Ameren sought to build a hydroelectric plant on Church Mountain in 2001, but backed off after opposition from environmental and conservation groups as well as then-Gov. Bob Holden and Nixon. While the settlement gives the state the right of first refusal if Ameren decides to sell its Church Mountain property, it does not prevent the utility from pursuing another plant.

Voss, the Ameren executive, said a hydroelectric plant on Church Mountain isn’t the utility’s best option now for low-cost electric generation. But the utility wants to preserve the option, he said.

Nixon spokesman Scott Holste said the attorney general led the fight against Ameren’s plans for a plant on Church Mountain six years ago and will do so again.

One thing the settlement is unlikely to do: end bickering over the issue between Nixon and Gov. Matt Blunt, opponents in next year’s governor’s election. The past year, each politician has tried hard to demonstrate he is doing a better job holding Ameren accountable for its failure.

In a statement Wednesday, Blunt said the settlement achieved two of his priorities — rebuilding Johnson’s Shut-Ins and extending the Katy Trail. But he criticized Nixon for taking too long and insisting that the state Department of Natural Resources — led by Blunt appointee Doyle Childers — give up its legal fight in the case.

Holste said Blunt’s criticism is off-base. He said the attorney general’s negotiations led to Ameren paying $54 million more than the governor proposed a year ago.

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

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