Utility Ameren Missouri Fighting for $30M Insurance Recovery

Ameren Missouri continues its fight to recover more than $30 million from one of its insurers five years after a section of the utility’s Taum Sauk reservoir collapsed and sent more than a billion gallons of water raging through Johnson’s Shut-Ins State Park.

The St. Louis Post-Dispatch reported that a federal judge in St. Louis threw out a lawsuit against Energy Insurance Mutual Ltd last week. U.S. District Judge Carol Jackson said she dismissed the case because the insurer’s contract with Ameren calls for arbitration before a lawsuit can be filed, and requires any lawsuit to be filed in the Southern District of New York.

The utility has paid out almost $200 million in settlements with state and private parties, according to the dismissed lawsuit. But as of June 15, Energy Insurance Mutual had paid Ameren $68.7 million out of $100 million in coverage Ameren had purchased from the company.

Energy Insurance Mutual is a joint venture among utilities that’s structured as a mutual insurance company.

An Ameren spokesman declined to say what the utility will do next to recover the insurance proceeds.

“It’s a legal issue, and we really can’t comment right now,” said Mike Cleary, the utility’s spokesman.

The Dec. 14, 2005, reservoir collapse sent water down the southeast Missouri mountainside, stripping trees, boulders and dirt and sweeping away the home of the Johnson’s Shut-Ins superintendent as he and his family slept inside. The family suffered only minor injuries.

Ameren sought reimbursement under the $100 million policy with Energy Insurance Mutual to help resolve litigation stemming from the disaster. That includes a $177 million settlement with the state of Missouri that was used to help clean up the park and extend Katy Trail State Park.

Ameren’s lawsuit says the insurer refused to pay the full amount available under the policy on the grounds that its settlement with the state was “excessive and inflated.”

Energy Insurance Mutual also said Ameren should not have paid other lawsuit settlements to private parties, the lawsuit says.

Ameren’s settlement with the state forbids the utility from recovering settlement costs or the costs of rebuilding the reservoir from electric customers.

Ameren is currently seeking $89 million from customers for “project enhancements” unrelated to the reservoir collapse.