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Some Republicans question rate-relief deal

Posted July 24, 2007 11:00 pm

Adriana Colindres

Some Republicans are wondering whether the $1 billion electric rate-relief deal hammered out by utility companies and state officials is everything it's cracked up to be.

"I think there's some concerns about it," House GOP Leader Tom Cross of Oswego said Tuesday. "In some areas, we're talking about (relief worth) $7 a month. I think people are expecting these great big relief packages, and I don't think they're going to happen."

"It sounds like a lot of money," he added. "But when you break it down, it's not that much money."

Rep. Bill Black, R-Danville, criticized Democrats on the House floor Tuesday for keeping "secret" the legislation describing the electricity deal. Republicans have yet to see the bill, he said.

On Monday, Senate President Emil Jones, House Speaker Michael Madigan and Attorney General Lisa Madigan, all Chicago Democrats, toured the state with other Democratic lawmakers to promote the electricity agreement they helped negotiate. The deal still needs legislative approval, which could come this week.

The rate-relief package includes a combination of rebate checks, credits on power bills for the next few years, assistance programs for low-income customers and a new way for the state to buy electricity in the future. In short, the package means that customers still will pay more for electricity than they did last year, but the rate increases won't be so dramatic.

The deal targets residential customers, small- to medium-sized businesses and not-for-profit organizations.

The $1 billion, most of which came from power generator Exelon, the parent company to Commonwealth Edison, is to be divided three ways. A total of $488 million is allocated for relief to Ameren Illinois customers, $488 million for relief to Commonwealth Edison customers and $25 million to fund a new agency that will oversee future power purchases.

Most of the financial relief will come this year, meaning there will be less in later years. Ameren customers, for instance, will get about $250 million in credits and other relief in 2007. For ComEd customers, $283 million worth of relief will be provided in 2007.

Officials from Ameren, which serves much of downstate, and Chicago-based ComEd held separate news conferences Tuesday to discuss details of the deal.

What the agreement would mean to utility customers depends on which company they buy power from and how much electricity they use.

Ameren estimates that the typical AmerenCILCO customer, who uses 10,000 kilowatt-hours of power in a year, would pay $1,162 (a 49 percent increase over 2006) without electric relief and $988 with relief in 2007.

The typical AmerenCIPS customer, also using 10,000 kwh, would pay $1,099 (a 30 percent increase over 2006) without electric rate relief and $967 with relief in 2007.

The typical AmerenIP customer, using 10,000 kwh, would pay $1,146 (a 35 percent increase over 2006) without electric relief and $1,014 with relief in 2007.

The 2007 rate increases - triggered by the expiration of a long-standing rate freeze - hit AmerenCILCO customers particularly hard, with all of them experiencing increases of 40 percent or more. According to Ameren, 83 percent of AmerenCILCO customers saw rates go up by more than 50 percent compared with last year, and the rest saw their rates rise by 40 percent to 50 percent.

By comparison, just 29 percent of AmerenCIPS customers and 15 percent of AmerenIP customers experienced rate increases of 40 percent or more this year.

If and when the rate-relief plan is enacted, only 2 percent of all three companies' customers will see rate hikes of 40 percent or more.

Information provided by Ameren shows that with rate relief:

-- The majority of AmerenCILCO customers - 60 percent of them - will see rate increases of 20 percent to 30 percent compared with 2006 rates.

-- The majority of AmerenCIPS customers - also 60 percent of them - will see rate increases of 10 percent to 20 percent.

-- The largest chunk of AmerenIP customers - 50 percent of them - will see rate increases of 10 percent to 20 percent.

Ameren has posted information about the rate-relief agreement and assistance programs on its Web site at www.ameren.com.

ComEd customers will not get rebate checks. Instead, they will receive a one-time, lump-sum credit dating back to January and subsequent monthly credits. The onetime credit will range, on average, from about $30 to $90, ComEd officials said. The monthly credits will average from $4 to $13 a month in 2007.

Doug Finke of GateHouse News Service's State Capitol Bureau contributed to this report. Adriana Colindres can be reached at (217) 782-6292 or adriana.colindres@sj-r.com.

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