It would be wise to carefully weigh rate request
Decatur Herald & Review Editorial
January 28, 2010—Many homes and businesses are weathering this recession by learning how to get by on less expense.

At the same time, one of the few benefits of this recession is that the overall cost of living is remaining steady or, in some cases, declining. That's one of the reasons Social Security recipients won't get a cost of living adjustment this year. The formula used to arrive at the adjustment indicates that the cost of living hasn't increased.

Given that evidence, the Illinois Commerce Commission should take a microscope, and perhaps a knife, to the $130 million rate increase being requested by Ameren's Illinois utilities.

Ameren is asking for the increase on natural gas and electric delivery charges. Consumers pay the actual cost of generation of gas and electricity, so that part of the bill isn't affected.

The final decision rests in the hands of the commission, which, given past history, isn't great news for consumers. In the last rate hike case, Ameren requested an increase of $247 million. Regulators granted an increase of $162 million, but that decision was more than what was recommended by the commerce commission's own staff.

Rep. Bob Flider, D-Mount Zion, has been making the case in front of the commission that Ameren actually should roll back its delivery rate, arguing that the recession has forced people to cut back. Flider said he's fighting on, despite some comments that opposing Ameren isn't worth the effort.

"I, however, continue to believe we must continue to press the case," he said. Flider was the chief sponsor of legislation that requires the commission to hear from consumers on these rate cases. One of those hearings was held in Springfield last week.

Ameren officials contend that they have cut back, and the rate increase is necessary to maintain reliable service. Ameren spokesman Leigh Morris said the company has cut 300 jobs while "not scrimping on reliability."

But the most interesting comment came from Jacqueline Voiles, director of regulatory affairs for Ameren Illinois Utilities. "All of our costs are going up, just like our customers' costs at the grocery store and gas pump," she said.

The commission should question Ameren carefully about that assumption. The rate of inflation at the end of the year was just slightly down from the year before. Can Ameren really justify that increased expenses are behind their rate increase?

It's also worth exploring why, after a $162 million increase in 2008, an additional $130 million is needed now. How many other companies have raised their prices since 2008 to that degree?

The Ameren companies and their stockholders deserve a fair rate of return on their investment. But consumers also deserve a fair price. Historically, the commission has given utility companies such as Ameren the benefit of the doubt.

But in these difficult economic times, it's important that the commission look at Ameren's rate increase closely and take into account that many customers are learning to do more with less.