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Thursday, Jan. 12, 2012 06:37 pm

Ameren Illinois launches 10-year modernization plan

Proposed new rates could mean a decrease for some customers

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Ameren Illinois, a subsidiary of Ameren Corporation, took its first step in implementing its Modernization Action Plan (MAP) on Tuesday, Jan.3. The plan will provide customers with a more reliable and modernized electric distribution system.

 In a press release, Ameren said that over the next decade an additional $625 million will be invested in updating the Ameren Illinois electric delivery system, while also creating 450 new jobs during the program’s peak year. Ameren Illinois serves 20,767 customers in Sangamon County.

“Today’s filing with the Illinois Commerce Commission marks the beginning of an initiative that will enable Ameren Illinois to modernize its electric distribution system over the next 10 years in order to meet the service expectations of our customers in the 21st century,” said Craig Nelson, senior vice president of Ameren Illinois.

The filing includes the deployment of about 750,000 automated “smart” meters, greater use of advanced distribution system automation, the modernization and expansion of electric substations and the installation of new transformers.

Smart meters allow consumers and utility companies to monitor electricity more closely during the day through the usage of wireless transmitters, while also allowing a utility company to “talk” to the meters and adjust power usage and distribution throughout the day.     

Ameren spokesman Leigh Morris said that a major advantage of the “smart” meters is Ameren customers will be able to take advantage of a “time-of-use service.”

Morris said that there is the potential, for people who choose to use the “time-of-use service” to save money.

“Customers can choose to buy electricity at a certain time of the day, at the certain price it is offered at during that time,” Morris said. “You can imagine that electricity is typically going to cost more at three in the afternoon than at seven in the morning. Like anything else, it is about supply and demand.”

The filing with the ICC also uses a performance-based formula rate-setting method. This method will be used to determine if Ameren Illinois is meeting its goals. Under the Energy Infrastructure Modernization Act, financial penalties will be assessed against them if they are not.

A supermajority of the Illinois General Assembly voted Oct. 26 to enact the Energy Infrastructure Modernization Act, which made possible the performance-based formula rate-setting method.

The ICC has 270 days for a complete review of the filing. If the ICC approves, the new rates are expected to take effect in October.

If approved, Ameren’s electric rates would decline by $19 million a year, Morris said. Customers in Ameren rate zones 1 and 3 (formerly AmerenCIPS and IP) will see a small decrease in rates, while customers in zone 2 (formerly CILCO) will see an increase.

Morris said that the official breakdown of the proposed rates and how they will impact Ameren Illinois customers will be available on Feb. 1 by using the rate estimator at Illinoisratefacts.com. This information will also be available, beginning Feb. 1, by calling Ameren customer service at 1-800-755-5000.

In November 2011, the Illinois legislature passed legislation allowing Missouri-based Ameren and Chicago-based Commonwealth Edison to increase rates with less regulatory oversight in exchange for an upgrade to the electrical grid.

“Our initiative was made possible by the Illinois Energy Infrastructure Modernization Act which was enacted last October,” Nelson said. “Customers will benefit through improved service reliability and a greater potential for energy savings. The law also is designed to provide greater regulatory certainty and financial stability for participating utilities.”

Morris said that one of the biggest benefits that Ameren Illinois customers will notice through the MAP program is “greater service reliability.”

“What we are talking about is fewer outages and when outages do occur, they will be in shorter duration,” Morris said.

“We needed to update and automate our system. These types of devices (automated) are capable of identifying a problem before it causes an outage. If you have this equipment in place then you can prevent many outages and the customer never loses service. If there is an outage, then this equipment will allow us to isolate the outage and keep it from spreading.”

Contact Neil Schneider at nschneider@illinoistimes.com

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