Three years after Ameren Illinois customers were hit with a steep increase in the price for electricity, the utility told the Belleville News-Democrat that customers can now expect a big drop in the supply price on June 1.
It’s a victory for Illinois Attorney General Lisa Madigan, CUB and all consumer advocates who pushed for reforms in the market.
In April, Ameren said customers who pay the utility’s supply rate—meaning they are NOT with an alternative supplier—could see savings of $8 per month on the supply part of their bill beginning in June. (That’s for a customer who uses 10,000 kilowatt-hours a year.)
We don’t yet know what the exact price for electricity will be, but CUB will make sure to alert you as soon as we do.
The development is a reversal of the bad news customers received in 2015, when supply rates for Ameren customers jumped 30 percent across Central and Southern Illinois.
Back then, consumer advocates declared the increase unjust and unreasonable. The hike was connected to a yearly auction held by the Midcontinent Independent System Operator (MISO), the power grid operator for all or parts of 15 states, including Central and Southern Illinois.
The auction determines “capacity” costs for the next year (June 1-May 31). These costs are fees wrapped in electricity prices that ensure power plants produce enough energy when demand is high.
In the April 2015 auction, Illinois’ capacity cost increased nine-fold to $150/megawatt-day, leading to the jump in Ameren bills. Illinois was the only state that suffered a huge increase, even though it has a surplus of power.
Attorney General Madigan led the charge, calling for an investigation into the price spike, which had sparked a windfall for power generators, and CUB held news conferences across the state to raise awareness on the issue.
“Our power market needs a revamp,” CUB Executive Director David Kolata said at the time. “These auction results are a huge red flag that the capacity market, and the rules that govern it, are not working for consumers.
(Just to be clear, Ameren, the regulated utility, isn’t to blame–and actually supported market reforms also. It doesn’t profit off supply rates, because it’s not a power generator.)
Thankfully, the Federal Energy Regulatory Commission did eventually rule that MISO had to make key changes to auction rules, and that has led to lower rates over the last few years, including the drop this June.
On top of that decrease, Ameren customers are also enjoying lower rates on the delivery part of the bill because of the corporate tax cut OK’d by Congress last year. That has lowered Ameren electric bills by $50 million, and gas bills by $15.8 million.
Unfortunately, that good news is dampened by two proposed increases to the delivery part of the bill pending before the Illinois Commerce Commission (ICC): a $46.6 million gas hike, and a $71.75 million electric hike. We’re fighting them!