A Good Day For Illinois Consumers!
ICC Follows Law, Slashes Ameren Rate Hike
CHICAGO, April 30, 2010—Eleven months after Ameren Corp. filed a request for a $226 million rate hike, the Illinois Commerce Commission (ICC) voted 3-2 to slash the proposed increase by more than 90 percent in a ruling that protects consumers while giving the company the funds it needs to provide safe and reliable service.

ICC Chairman Manuel Flores and Commissioners Sherman Elliott and John Colgan voted in favor of the final order on Thursday. Commissioners Erin M. O’Connell-Diaz and Lula Ford voted against it.

“The ICC followed the law and carefully considered the evidence, which showed that Ameren did not need anything close to a $226 million increase,” CUB Executive Director David Kolata said. “In today’s tough economic climate, it’s more important than ever that Ameren not be allowed to unfairly pad its profits on the backs of ratepayers.”

Kolata also praised Ameren customers for working so hard to defeat an unjustified rate hike. Before Thursday's decision, ICC officials said they had received about 2,000 comments from Illinois consumers about Ameren's rate-hike request and another 2,000 petition signatures. The vast majority of the consumers who contacted the commission were against the increase, the ICC said.

"Once again, Ameren customers proved that the utilities may have the electricity, but the people have the power," he said. "We thank you for never giving up during this 11-month battle against an unjustified rate hike."

The ICC ruling came nearly two months after CUB and a coalition of consumer advocates, including Illinois Attorney General Lisa Madigan, AARP Illinois, and state legislators, launched a statewide campaign urging state regulators to slash the Ameren increase.

Ameren’s proposal had come under increasing criticism since the power and natural gas provider had first asked for the rate hike in June of 2009, less than a year after the ICC had given it a $162 million increase.

In February, the company announced that it had raked in $612 million in 2009 profits and more than doubled the earnings for its Illinois utilities, from $51 million to $127 million. That same month, an ICC judge recommended that the commission cut Ameren’s increase by more than half, to $56 million. The ICC's final order came closer to what consumer advocates had said the company should get. CUB and the Attorney General’s office argued in testimony that Ameren didn’t deserve an increase and should instead give its customers an overall $6 million rate cut.

The rate hike affects Ameren's "delivery" fees, what the company charges to cover the costs of delivering natural gas and electricity to a customer's home, plus a profit for stockholders. The delivery portion of a bill consists of the fixed monthly customer charge and a per-therm or a per-kilowatt-hour distribution charge. These charges account for about one-third of a residential gas or electric bill. The charge for the actual gas or electricity used accounts for the other two-thirds of the bill.

Over the course of the case the amount of the rate hike was adjusted from $226 million to $162 million. While final numbers are not yet in, the ICC has given estimates of how the reduced rate hike will impact Ameren customers.

AmerenCILCO
What It Wanted:
$21.6 million electric rate hike
$6.3 million gas rate hike

What The ICC Ruled:
$1.4 million electric rate hike (1.2 percent increase)
$9.2 million gas rate cut (12 percent reduction)

AmerenCIPS
What It Wanted:
$41.4 million electric rate hike
$7.1 million gas rate hike

What The ICC Ruled:
$16.6 million electric rate hike (7.6 percent increase)
$3 million gas rate cut (4 percent reduction)

AmerenIP
What It Wanted:
$72.8 million electric rate hike
$13.1 million gas rate hike

What The ICC Ruled:
$13.5 million electric rate hike (3.1 percent increase)
$14.6 million gas rate cut (8.5 percent reduction)

The new rates will take effect in early May, and CUB will update its Making Sense of Your Electric Bill fact sheet to reflect the changes.