Opposition growing to bill that would allow automatic rate hikes by Ameren, ComEd
By Tony Reid, Decatur Herald & Review
May 13, 2011 — The battle over reshaping the way Central Illinois families and businesses are charged for electric and natural gas service is coming down to the wire with no clear winner in sight.

Read the original version of the story on the Herald & Review's website.
At issue is House Bill 14 in the state legislature that would allow Ameren Illinois and Commonwealth Edison to receive annual delivery cost rate hikes for electricity and natural gas that would be subject to review only after they go into effect.

The current system requires a utility to file a complex rate case first and then wait about a year while it is dissected in public hearings before being ruled on by the Illinois Commerce Commission, the state's rate regulators. Only then does the ICC decide precisely how much more cash the utility is allowed to earn, if any, and the corresponding rates set.

Critics such as AARP claim the new rate system proposed in House Bill 14 is an ATM machine for utilities to profit from built-in rate hikes. Ameren Illinois responds by saying the new legislation would drag an archaic rate system into the 21st century and, even though it would be done retroactively, the new rates are still subject to review by the ICC, which could compel perceived overcharges be refunded with interest.

Lawmakers are expected to vote on the bill before their hectic spring session closes at the end of the month. Gov. Pat Quinn has warned he will veto the proposed law as it stands.

But the bill's stance may be undergoing some voltage fluctuations. An amended version is in the works that apparently would make the bill more palatable to the governor and other critics. This tweaked version wasn't made public as of Thursday, but opponents already fear it will offer only cosmetic alterations in an attempt to make Quinn put down his veto pen.

"We don't expect any huge changes," said Scott Musser, AARP associate state director of advocacy. "Sort of lipstick on a pig."

AARP has been joined by the Citizens Utility Board public watchdog group and the office of Illinois Attorney General Lisa Madigan in labeling the bill in its current form as a bad deal for utility customers.

As proposed, the legislation would require Ameren Illinois to also spend $950 million over 10 years updating its electrical and natural gas delivery systems and hit performance targets. The cost of the infrastructure upgrades would add $3.40 a year to an average electrical customer's bill for each of the 10 years.

AARP said that isn't fair for customers who will be facing annual delivery rate increases and then get charged for extra upgrades they might not need or want. "Are the benefits going to be there for consumers?" said Musser. "It's a big risk for them."

The Citizens Utility Board has said the claims of electrical grid and other upgrades in the bill are only a "Trojan Horse," designed to look good while opening a path for "automatic rate hikes."

Ameren counters by saying the critics are misrepresenting how the new delivery fee system would work. It said the proposal would be more efficient than the present system, which dates to the 1920s, and ensures a more reliable and timely revenue stream for utilities to recoup their costs and investment. But the company said that does not mean it gets an blank check to charge whatever it wants.

After new rates go into effect, the utility said, the ICC will have more than eight months to review them and can reject any or all fees it doesn't like. It can then order refunds to customers, delivered with an interest rate, set by the ICC, to compensate for the delay.

"And during that review process, the public has just as much input as it's ever had," said Ameren Illinois spokesman Leigh Morris. "The Illinois Commerce Commission has absolute oversight, and I think it's unfair to the commission to suggest that they are not going to do their oversight job."

Morris said he couldn't comment on what any revised legislation might look like until it's presented in its final form, but he said a certain amount of give-and-take and alteration is the normal course of any bill and to be expected as lawmakers look for a workable compromise.

"I guess to an outsider, it might seem surprising, but I've never seen any significant legislation end where it started," he said. "It's fluid, and there are amendments and revisions. That is just the way the process works."