During 2006, 723 Severe Weather Events were Recorded by the National Weather Service's office in St. Louis, Missouri, U.S. This was more than any other National Weather Service office in the United States. There were also 102 tornadoes in Missouri during 2006, which set a new record. For AmerenUE (St. Louis), this volatile weather resulted in outage events for its Missouri electric customers that were unprecedented in its century-long history.

BAD WEATHER ON PARADE

In fact, in the four years beginning in 2004, AmerenUE and its 1.2 million electric customers endured a litany of continually record-breaking severe weather events — record-breaking from the aspect of the number of customers out of service, the number of substations and distribution circuits out concurrently, and the number of outside resources (contractors, mutual assistance partners and electric cooperatives) called to assist in restoration efforts. This culminated in the second half of 2006 and early 2007, when back-to-back summer storms on July 19 and July 21 left a total 645,000 customers out of service, and back-to-back ice storms on Nov. 30 and Jan. 13 (the first severe ice events in 30 years) left 290,000 and 350,000 customers out, respectively.

Most of these events triggered investigations by the Missouri Public Service Commission that together carried dozens of recommendations in their wake. Customer-satisfaction ratings reached their lowest levels in years. The outcry was fueled by persistent negative press and pressure from elected officials at all levels of government. In hindsight, AmerenUE's rate-case submittal, filed just before the July 2006 storm (its first rate-increase proposal in 20 years), came at an unfortunate time and didn't help matters.

WHAT MISSOURI CUSTOMERS WANT

Along the way, AmerenUE conducted focus groups involving more than 500 people across every imaginable cross section of its customer base. The intent was to get back in touch with what its customers consider important and what they want from their local utility. In addition, the company reached out to a wide range of elected and appointed officials and community leaders. The two major issues that emerged from these discussions were a customer demand for improved service reliability and a renewed focus on environmental stewardship.

There was a time in recent history when AmerenUE management believed the low cost of service was most important to Missouri customers, and the company responded with a consistent strategy of providing just that. For many years, AmerenUE's electric rates have remained among the lowest in the nation among major metropolitan areas. However, AmerenUE's focus group discussions have shown that today, especially in light of the Midwest's recent weather volatility, the major factor driving customer satisfaction is reliable electric service.

With this realization has come a fundamental shift in AmerenUE's energy-delivery strategy, one recognizing that previously conventional practices in distribution system maintenance, vegetation management and reliability engineering would never be sufficient again. It was on this premise that Project Power On was conceptualized and ultimately announced to Missouri customers.

POWER ON'S UNDERGROUND PROGRAM

• Improving overall service reliability

• Proactively upgrading the power-delivery system to stand up against future severe weather

• Enhancing the environmental performance of Missouri's fossil-fueled generating stations.

Project Power On is comprised of four basic elements, including a $300 million commitment to the application of under-grounding solutions to a number of reliability problems throughout the Missouri service territory. [The other three initiatives are detailed in the sidebar above.]

From a traditional perspective, the $300 million undergrounding program represents a dramatic departure from convention, both for AmerenUE and most of the electric utility industry. It is the single-largest distribution project ever undertaken in AmerenUE's history, and it is intended, above all else, to underground some of its most troublesome and outage-prone overhead power lines. There is no model in the industry today for a project of this nature and scale, but AmerenUE envisions it should be able to build 750 to 1000 individual projects of various sizes and to convert up to 200 miles (322 km) of its poorest-performing overhead circuitry — particularly those shown to be most susceptible to damage by trees during severe weather.