|
You've Got To Be Kidding!
December 7, 2009—A CUB review of recent rate-hike cases found that Illinois utilities either have slapped or want to slap their customers with more than $30 million in legal fees, meaning the hard-earned cash consumers sink into electric and gas bills
We Bankroll Rate-hike Hungry Utilities? Ameren*
Legal fees
$6.9 million. Rate hike
$162 million pending. CUB is fighting. *Ameren has since reduced its rate-hike request to $142 million.
ComEd
Legal fees
$11.5 million. Rate hike
$273 million granted last year. CUB is appealing. Illinois American Water
Legal fees
$2.3 million. Rate hike
$58.6 million pending. CUB is fighting. NICOR
Legal fees
$6.4 million. Rate hike
$80 million approved and Nicor is appealing for more. CUB is opposing. Peoples Gas/North Shore Gas
Legal fees
$7.4 million. Rate hike
$131 million pending. CUB is fighting. In asking for increases, utilities will request that consumers pay for at least a portion of the legal expenses—fees for lawyers and expert witnesses—they rack up in 11-month rate-hike cases before the Illinois Commerce Commission (ICC). As consumer advocates like CUB fight for lower rates, the ICC will consider the utility’s proposed amounts along with other expenses the company wants recovered through customer rates. “It’s like forcing David to pay for Goliath’s steroid injections,” CUB Board President Robert Craig Neff, of Northbrook, said. “It’s only fair that utilities make shareholders finance their multimillion-dollar legal maneuvers for higher rates. I can’t think of a better reason to fight these unfair increases.” CUB’s legal team turned back more than $200 million in rate hikes last year, and this year it’s battling about $1 billion worth of cases before the ICC or the courts—including appeals of old rate hikes, new rate-hike campaigns launched by the utilities, and CUB's case for a $287 million gas refund. Utilities easily spend more than CUB’s annual budget on one rate-hike case alone. CUB crunched the numbers for the current or last rate-hike cases of Illinois’ top utilities. It found a total of $34.5 million in legal fees the companies have spent to raise customer rates. Of that total, individual companies are either proposing to pin a chunk of that on consumers or have already been given the OK by the ICC. The individual amounts range from $6.4 million, approved in Nicor Gas’ rate hike earlier this year, to $6.9 million Ameren is proposing to pin on customers in its current push for a natural gas and electric increase, to $11.5 million as part of ComEd’s rate hike approved last year. In these cases, whatever amount is approved by the ICC is spread out—or amortized—over years. CUB has fought to cap the amounts customers should pay for legal fees, and it did help win a small victory in the last legislative session. The ICC is now required to directly address and justify the amount of legal fees it approved in a rate hike’s final order. “It’s outrageous what an army of utility lawyers will try to get away with, but we have a secret weapon: You,” Neff said. “Thanks to Illinois consumers, we’ve beaten the odds by beating back rake hikes and securing refunds to help consumers save more than $10 billion over the last 25 years.” Give to CUB's consumer-defense fund to help fight the utilities' rate hikes and protect your bottom line. |