CUB Commends Illinois Commerce Commission (ICC) for Following Law, Slashing Ameren Rate Hike

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Apr 29, 2010, 05:35 ET

CHICAGO, April 29 /PRNewswire-USNewswire/ --The Citizens Utility Board (CUB) on Thursday praised the Illinois Commerce Commission (ICC) for slashing Ameren Corp.'s proposed $130 million rate hike—a decision that protects consumers from an unfair increase while giving the company the funds it needs to provide safe and reliable service.

Although final numbers were not yet in, initial estimates were that the ICC voted 3-2 to cut the proposed increase by about 96 percent, to roughly $5 million, spread out over Ameren's three utilities, AmerenCILCO, AmerenCIPS, and AmerenIP. ICC Chairman Manuel Flores and Commissioners Sherman Elliott and John Colgan voted in favor of the final order. 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 $130 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."

Thursday's decision 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 made $612 million in 2009 and more than doubled the profit for its Illinois utilities, from $51 million to $127 million. In that same month, an ICC judge recommended that the commission cut Ameren's increase by more than half, to $56 million. 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 will be levied on 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.

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 or visit its award-winning website, www.CitizensUtilityBoard.org.

SOURCE Citizens Utility Board