ICC approves Ameren gas and electric delivery rate hikes

According to a consumer utility watchdog group, Ameren Illinois today received about $150 million in electric and gas delivery rate hikes.

Citizens Utility Board Executive Director David Kolata says while his group is pleased Ameren didn’t get as much as it wanted, CUB is disappointed that Ameren still received more than it proved it needed or deserved.

(Credit: Highwaystarz-Photography)
(Credit: Highwaystarz-Photography)

CUB plans to file petitions for rehearing to challenge both rate hikes before the Illinois Commerce Commission (ICC).

Ameren received the higher electric rates to pay for major upgrades to its power grid. If done right, these upgrades should pay for themselves through customer benefits in the long run, but CUB will continue to push Ameren to build a more reliable and less costly power grid.

Kolata says customers are paying the bill for these upgrades, so they deserve the benefits.

On Wednesday, the Illinois Commerce Commission voted 4-1 to give Ameren a $44.5 million, 12.44 percent natural gas rate hike. Ameren originally requested an increase of about $53 million. Consumer advocates argued that the company couldn’t justify any more than about half that amount.

The ICC voted unanimously to give Ameren electric customers a $105.8 million, 11.44 percent rate hike. The company had originally requested about $110 million.
Ameren determines electric delivery rates by formula, under the “Energy Infrastructure and Modernization Act,” or the “smart-grid bill,” passed by the Illinois General Assembly in 2011.

The law uses a formula to determine Ameren rates annually to pay for about $600 million in power-grid upgrades.

Under the new system, regulators and consumer advocates are limited in how much they can reduce rate hikes. CUB fought for at least $10 million in reductions

The gas ruling gave Ameren a return on equity (profit rate for shareholders) of 9.6 percent; the electric ruling gave the company a return on equity of 9.14 percent.

The rulings affect “delivery” rates. That’s what Ameren charges to deliver gas and electricity to homes. Those charges take up about a third to a half of a bill.

CUB is Illinois’ leading nonprofit utility watchdog organization. It was created by the Illinois legislature in 1983 to represent the interests of residential and small-business utility customers. Since then, CUB has saved consumers more than $10 billion by helping to block rate hikes and secure refunds. To learn more, call CUB’s Consumer Hotline at 1-800-669-5556.