CUB To Appeal ICC's Decision Giving Ameren $162 Million Increase
CHICAGO, September 24, 2008—The Citizens Utility Board (CUB) on Wednesday promised to appeal a ruling by the Illinois Commerce Commission (ICC) to grant Ameren a rate hike that will slap natural gas and electric customers with $162 million in higher costs.

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The ICC’s final order was not immediately released. However, rough initial estimates showed that AmerenIP and most AmerenCIPS customers are getting hit with about $130 million in higher electric rates and about $30 million in higher gas rates. AmerenCILCO customers are actually getting slight rate decreases.

“Ameren overstated its expenses to justify an exorbitant rate hike it doesn’t need or deserve, and that’s why we plan to appeal,” CUB Executive Director David Kolata said. “Although we’re glad that
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AmerenCILCO customers were spared an increase, we are disappointed that AmerenIP and AmerenCIPS customers are getting hit with an unfair rate hike. That’s the last thing Ameren customers need as they face tough economic times, soaring energy prices, and an expensive Illinois winter.”

Experts hired by CUB and other consumer advocates found that Ameren had overstated expenses and, at most, could justify only a rate hike of $58 million. However, three ICC judges more than doubled that number in their recommendation, which was similar to the ICC’s final ruling on Wednesday.

The rate hike, which could take effect as early as next week, will hit the “delivery” charges on bills. That’s what customers pay to cover Ameren’s maintenance and upkeep costs for delivering power to homes. It’s also where Ameren earns a profit. Delivery costs account for roughly a third of a monthly bill, on top of the actual cost for the electricity or natural gas.

Just last year, Ameren customers were hit with a similar rate hike of about $100 million. In addition, customers paid huge power-bill increases due to a “reverse-auction” power-pricing system, before state officials forced Ameren and ComEd to abolish it. The parent company of Ameren’s Illinois utilities has pulled in record or near-record profits this decade, including $690 million in 2007.

Ameren also proposed recovering investments in new “smart grid” technology through an extra charge called a “rider.” Based on CUB’s recommendation, the ICC rejected the rider and instead directed Ameren to participate in a series of workshops in which consumer groups can help to create a costeffective smart-grid program that can save consumers money.

If done right, smart-grid technology could, for example, cut costs by automatically fixing power outages and allow for consumers to have “smart appliances” that would automatically cycle on and off or power down when not in use. “One silver lining in today’s ruling is that it lays the groundwork for Ameren to improve what has been a 19th century electricity grid struggling to keep pace in a 21st century world,” Kolata said. “That’s a step in the right direction.”

CUB is Illinois’ leading nonprofit utility watchdog organization. It was created by the Illinois legislature in 1983 to represent the interests of residential and small-business utility customers. Since then, CUB has saved consumers more than $10 billion by helping to block rate hikes and secure refunds. For more information, call CUB’s Consumer Hotline, at 1-800-669-5556.