Settlement reached in Taum Sauk reservoir collapse

ST. LOUIS (AP) -- Ameren Corp. announced Wednesday that it had reached an agreement that will require the utility to pay $180 million in cash and property to compensate for damages resulting from the Taum Sauk reservoir collapse.

The settlement ends months of negotiations between the St. Louis-based company and three state agencies. The agreement will end a lawsuit filed by Attorney General Jay Nixon and settle all other state demands for compensation.

The mountaintop reservoir was part of a hydroelectric plant and collapsed on Dec. 14, 2005, after Ameren delayed critical repairs there and faulty instruments caused the basin to overflow. The resulting flood devastated vast tracts of the Johnson's Shut-Ins State Park and injured a family of five.

The bulk of the settlement cost -- some $103 million -- will go toward rebuilding the state park. Ameren also agreed to pay the Missouri Department of Natural Resources $18 million to extend the Katy Trail along 46 miles of the company's Rock Island Railroad.

While all the parties have agreed to its terms, the settlement will not be official until a judge approves it after a 30-day period for public comment. The agreement was filed in Reynolds County Circuit Court, where Nixon's lawsuit is being heard.

All the parties who signed the settlement praised it Wednesday morning as a fair compensation for the state and residents of rural Reynolds County, where the reservoir is located. Ameren is rebuilding the profitable plant, which is a pillar of the area's tax base.

"We think there's a fair balance there. We didn't get everything we want, but that's part of getting a settlement that is this extensive," said Department of Natural Resources Director Doyle Childers.

"I am pleased that in addition to providing direct assistance to the citizens of Reynolds County, we have an agreement that includes rebuilding Johnson's Shut-Ins State Park and completing the Katy Trail from St. Louis to Kansas City which have been priorities for me," Gov. Matt Blunt said in a statement.

Nixon said in a statement the settlement "satisfies my requirement for 'the three Rs,' which are the demands I have made from the beginning. Those are that Ameren's ratepayers be protected from bearing any of the costs related to the collapse, that the state of Missouri and other injured parties receive adequate recompense for their losses, and that Ameren must rebuild the Taum Sauk reservoir."

The deal requires Ameren to pay $56.2 million in cash, including $7 million for an economic development fund in Reynolds County, where the reservoir is located.

Ameren is also required to spend $52 million to rebuild Johnson's Shut-Ins, while the settlement gives Ameren $51 million in "credit" for the cleanup work it has already performed.

"We needed no outside pressure to begin restoring the park, supporting the communities around the park or cooperating with state and federal agencies to determine the root causes of this disaster," said Thomas Voss, chief executive of Ameren's Missouri subsidiary, AmerenUE. "Now, AmerenUE can begin rebuilding this important plant for the benefit of the citizens of Missouri and those who live in the Taum Sauk area."

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A look at the settlement for the Taum Sauk reservoir failure

By The Associated Press

Missouri and Ameren Corp. have agreed to a settlement for the December 2005 collapse of the utility's Taum Sauk reservoir. Here is a look at its details:

NEW RESERVOIR

Ameren will replace the reservoir that collapsed. The attorney general's office estimates the cost at $350 million.

RATEPAYERS

Ameren agrees not to try to recover the costs of the settlement through higher electricity rates for its customers.

CRIMINAL CHARGES

The state pledges that no criminal charges will be brought against Ameren or its employees related to the reservoir collapse.

CLEANUP

Ameren will pay $103 million to clean up and restore the area around Johnson Shut-Ins State Park. That includes $51 million of work already completed and up to $52 million of additional work. Those figures also include $15 million of park improvements.

KATY TRAIL

Ameren will pay $18 million to the Department of Natural Resources for the construction of a 46-mile extension of the Katy Trail State Park between Windsor and Pleasant Hill, which would complete the biking and hiking trail between the Kansas City and St. Louis areas. The railway right of way for the trail is valued at an additional $15 million.

STATE PAYMENTS

Ameren agrees to pay the state:

-- $11.875 million for Missouri parks.

-- $6 million to the Department of Conservation.

-- $4.281 million to the natural resources protection fund.

-- $3.194 million to cover state emergency response costs to the disaster. That includes $2 million already paid. The additional money will buy 6 environmental response vehicles for the Department of Natural Resources.

-- $2 million to monitor water quality and environmental issues in the Taum Sauk area.

-- $2 million to the state parks fund to compensate for lost timber and revenues at Johnson Shut-Ins State Park.

LOCAL PAYMENTS

Ameren agrees to pay:

-- $7 million for a new nonprofit entity to promote tourism and economic development in the area effected by the reservoir collapse. The attorney general will appoint the group's governing board. Its potential projects will include a sewage treatment system for Lesterville.

-- $5 million for local education. That includes $2 million to the Reynolds County school fund and $3 million for a new Reynolds County educational enrichment fund to be controlled by a nonprofit board.

-- At least $600,000 a year, for the next four years, in property taxes to Reynolds County. If rebuilding of the reservoir results in a higher property value, then Ameren will pay more in taxes.

CHURCH MOUNTAIN

Ameren will give the Department of Natural Resources the first right to acquire ownership of Church Mountain in Reynolds County, if Ameren decides to sell it in the next 20 years. The right to acquire the land is valued in the settlement at $33 million.

SAFETY

Ameren will develop and install a warning system and evacuation plan to protect people below the reservoir in case of another overflow of water.

DISPUTES

Ameren agrees to pay for someone to serve as a special master to the court to help resolve any disputes arising from the cleanup and restoration work.

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A timeline of events for the Taum Sauk reservoir failure

By The Associated Press

2005

Dec. 14 -- Ameren Corp.'s mountaintop Taum Sauk reservoir fails, washing out Johnson's Shut-Ins State Park and injuring a family of five.

2006

Jan. 26 -- The attorney general's office is appointed by a court as a special prosecutor for the reservoir collapse.

Feb. 21 -- Ameren says it has reached a legal settlement with the park superintendent's family injured when the reservoir failed.

April 7 -- Ameren releases a report it commissioned that concludes poor construction and instrument problems were partly to blame for the disaster.

April 14 -- Gov. Matt Blunt says he wants Ameren to give the state a mountain near Taum Sauk and a rail line that could be used for the Katy Trail State Park as part of its compensation for the reservoir collapse.

May 1 -- The Federal Energy Regulatory Commission releases a report saying Ameren new of critical problems at Taum Sauk but delayed repairs.

June 5 -- News reports show Nixon received $19,000 in contributions indirectly from Ameren as the state was investigating the Taum Sauk reservoir collapse.

June 8 -- Nixon's campaign says it will return the $19,000 in donations.

Oct 2 -- The Federal Energy Regulatory Commission says Ameren has agreed to pay $15 million because of the Taum Sauk reservoir collapse.

Dec. 12 -- The Department of Natural Resources says it has proposed a settlement with Ameren over the reservoir collapse. Details made public two days later show it called for Ameren to pay more than $125 million, but the deal never was finalized.

Dec. 13 -- Nixon sues Ameren over the reservoir collapse, alleging the company endangered lives and caused millions of dollars of damage.

2007

May 18 -- Nixon announces he will not pursue criminal charges against Ameren for the Taum Sauk reservoir collapse.

June 4 -- The Missouri State Highway Patrol's investigation report into the Taum Sauk collapse is made public.

July 24 -- The Missouri Public Service Commission begins hearings into the reservoir collapse.

Aug. 15 -- Federal Energy Regulatory Commission grants approval for Ameren to rebuild the reservoir.

Oct. 24 -- The Missouri Public Service Commission releases an investigation report concluding the reservoir collapse resulted from management problems at Ameren and could have been avoided. The PSC recommends management changes and safety improvements.

Nov. 7 -- Ameren announces it has selected a contractor to rebuild the reservoir but says work can't begin until it reaches a settlement with the state.

Nov. 28 -- The state and Ameren file a settlement agreement in court calling for the utility to pay about $180 million in cash and property for the Taum Sauk reservoir collapse.