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Thursday, March 18, 2010 12:29 pm

Ameren Illinois asking for $130 million rate increase

State watchdog cries foul

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Energy company Ameren is asking state regulators to approve a $130 million per year rate increase, but the state’s utility watchdog claims the company should instead lower its rates.

In June 2009, Ameren Illinois Utilities asked the Illinois Commerce Commission for approval to raise rates on natural gas and electricity delivery rates. AIU delivers electricity to 1.2 million Illinois customers outside Springfield, as well as 850,000 natural gas customers, some within Springfield.

The company originally asked ICC for a $226 million increase, but Ameren spokesman Leigh Morris says the request has been “pared down” because the company has cut $55 million from its operating budget by freezing management salaries, reducing employment numbers, increasing access to credit and getting better prices on gas and oil.

“We’ve done everything possible to reduce our need for a rate adjustment, but at the end of the day, we need an additional $130 million in revenue to adequately operate this company.”

But the Citizens Utility Board, created by the General Assembly in 1983 to represent Illinois utility customers, says AIU should actually give customers a $6 million rate decrease. In September 2009 CUB and Illinois Attorney General Lisa Madigan filed testimony opposing AIU’s request, saying the company doubled its profits last year, despite being “among the most wasteful (utility providers) in the country.”

“They’re wrong,” Leigh Morris says of CUB’s claims. “We need a rate increase to continue to build, operate and maintain our energy delivery system in a safe, reliable manner for the benefit of our customers.”

But Jim Chilsen, CUB director of communications, points out that Ameren asked for and received a $162 million natural gas delivery rate increase in 2008.

“Once again, this is a case of Ameren’s customers taking a backseat to the company’s bottom line, and Ameren customers are fed up,”  Chilsen says. “People see their bills going up, they see that Ameren’s Illinois utilities doubled their profits, and they’re justifiably upset.”

But Morris says there’s more to the story. Ameren is only an energy delivery company “like FedEx or UPS,” and the company doesn’t generate any energy. He says customers have a choice of providers when purchasing energy, and Ameren simply delivers it.

“UPS doesn’t care whether you buy from L.L. Bean or Land’s End, and they don’t care how much you paid; they just get paid to deliver your items,” Morris says. “We’re only talking about delivery service rates, not the cost of electricity.”

Morris says Ameren has gone to great lengths to make clear the impact of the potential increase on customers.

“We’ve done something that no other utility has done before, and that is putting on the customers’ bills exactly what the impact of the rate request would be,” he says. “Plus, you can go to our Web site, put in your bill number and see exactly what the impact would be on you – not your neighbor, not some meaningless average, but what it means for you. I know of no other utility that’s ever done that. We are committed to openness and transparency.”

ICC is expected to rule on the Ameren increase in late April.

For more information:
Rate adjustment impact - www.illinoisratefacts.com
Energy supplier choice - www.illinoispowerswitch.com
Citizens Utility Board - www.citizensutilityboard.org
Illinois Commerce Commission - www.icc.illinois.gov

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