Fighting Ameren's rate-hike request
Since then, the rate-hike request has been reduced to $90 million. The ICC is expected to make a ruling on Ameren's request by January 2012.
Background
The proposed increase was filed in February 2011, less than a year after the ICC had granted the company a $44 million rate hike. Since 2008, Ameren has received more than $200 million in rate hikes.
The rate hikes would affect a bill's delivery charges, which are the fees the companies charge to deliver gas and electricity to your home, plus a profit. The delivery portion of your bill consists of the fixed monthly customer charge and a per-therm or a per-kilowatt-hour distribution charge. They take up about one-third of your bill. The charge for the actual gas/electricity you use takes up the other two-thirds of the bill.
What CUB Says
Testimony filed by CUB and the Attorney General's office argues that Ameren does not deserve a $90 million rate hike and, in fact, owes customers an overall $2.2 million rate cut.
In testimony supporting the $2.2 million cut, consumer advocates argued, among other things, that Ameren is seeking an exorbitant return on equity—or profit rate for shareholders, a key factor in determining customer rates. CUB argued that Ameren should get a 8.22 percent to 9.06 percent return, not the 10.75 percent to 11 percent it wanted. That adjustment cut Ameren's increase by roughly $62 million.
The CUB and Attorney General analysis found that Ameren inflated estimates for operations and maintenance expenses connected to its natural gas and electric distribution system. For example, the company forecasted a 28 percent increase over its estimated electric distribution operations and maintenance spending from 2011 to 2012. There is no justification for Ameren to argue that current levels of spending are not adequate to properly maintain the system, the testimony said. Recommendations by CUB and the Attorney General’s office in this area reduced the rate hike by another $25 million.
Talking Points
- Ameren's Illinois utilities have received more than $200 million in rate hikes from 2008 to 2010, the same year its parent company made a profit of $657 million.
- Last year, profits for Ameren's Illinois utilities increased 60 percent, from $130 million in 2009 to $208 million in 2010. And Illinois profits this year will be bolstered by this summer's hot weather. This is not a company that needs or deserves a massive rate hike.
- Ameren's rate-hike request is a slap in the face to consumers who already are struggling to pay monthly bills during an economic downturn. Most Ameren customers didn’t see their wages increase last year. Yet Ameren's Illinois utilities, which made $78 million more in 2010 than the year prior, are asking customers for yet another big pay raise.
-The company's timing is horrible. The inkk was barely dry on Ameren's $44 million rate hike in 2010, and in less than a year the company was back at the table, asking for more. Increasing customers’ fixed monthly costs is a not the way to stimulate an economy that's still struggling to get on its feet.
-Consumers shouldn't have to shoulder the burden for Ameren's poor maintenance record. In 2009, CUB commissioned an econometric study showing the electric utility was one of the least efficient in the nation.
Take Action
Help CUB fight the rate hike by filing an online comment with state regulators. (The comment can be as simple as “No Ameren increase.”) Use docket number 11-0279 to comment on Ameren's electric rate increase and 11-0282 to comment on the company's natural gas request. Or you can call the ICC at 1-800-524-0795. (This information also is available at CUB's Stop Ameren page.)
Also, please give to CUB's consumer-defense fund to help us fight rate hikes.
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