Illinois Attorney General's Office, CUB Push For $41.1 Million Electric Rate Cut For Ameren Customers

News provided by

Dec 05, 2011, 12:14 ET

CHICAGO, Dec. 5, 2011 /PRNewswire-USNewswire/ -- The Citizens Utility Board (CUB) and Illinois Attorney General Lisa Madigan's office are trying to block a move by Ameren that would allow it to avoid a potential $41.1 million electric rate decrease in the wake of a state regulatory judge's recommendation to order the cut.

In November, Ameren filed a motion before the Illinois Commerce Commission (ICC) asking to withdraw the $40 million electric portion of its natural gas and power rate-hike request, which began at $111 million but has been whittled down to $90 million over the course of the case.

Normally, consumer advocates would welcome a utility's offer to drop a rate hike. However, as part of that rate case, an administrative law judge recently recommended that the ICC order the company to give electric customers a $41.1 million rate decrease. The ICC is set to decide the case in January.

"It's simply not fair for Ameren to duck out of a rate cut for its customers," CUB Executive Director David Kolata said. "We're asking the company to do the right thing and give its customers the rate decrease they deserve."

The response to Ameren's motion, filed jointly by the Attorney General and CUB, is the latest shot in a yearlong battle against the company's rate-hike request. CUB estimates the company's proposal could cost customers up to $100 a year. Ameren, which made $657 million in profits last year, has raked in more than $200 million in rate hikes for its Illinois utilities since 2008.

Attorney General Lisa Madigan pointed out that Ameren has had its electric delivery service rates increased several times in the past six years and that the new energy legislation passed last month was not intended to deny consumers the benefits of a rate decrease before the new law takes effect. "The regulatory process is supposed to protect ratepayers' pocketbooks, not just corporate profits," Madigan added, noting that the company recently increased its dividend and its stock is trading at a 52-week high.

CUB, the Attorney General's office, AARP Illinois, and some legislators campaigned over the summer for state regulators to give Ameren customers a rate cut. One of the key findings of consumer advocates is that Ameren is seeking an exorbitant return on equity (ROE)—an allowed profit rate for shareholders. The analysis also found that Ameren inflated estimates for operations and maintenance expenses related to its electric distribution system.

The administrative law judge largely agreed with consumer advocates in ordering the rate cut. Now, CUB is fighting to make sure that decrease materializes on customer bills next year.

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.

SOURCE Citizens Utility Board