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ICC aims for more equitable Ameren rate structure

Posted October 10, 2007 11:00 pm

Adriana Colindres

Responding to complaints that customers with electric heating systems got hit the hardest by this year's electric rate hikes, the Illinois Commerce Commission on Thursday changed how the Ameren Illinois utilities charge different customers for power.

In a news release, the ICC said the new rate formulas for Ameren and Chicago-based Commonwealth Edison will be more "just and reasonable." The changes are scheduled to take effect Dec. 1.

The commission's action is another consequence of the electric rate hikes that took effect this year after the expiration of a long-standing rate freeze that had been part of the state's 1997 electric deregulation law.

Last year, Ameren officials said typical residential customers would see increases as high as 55 percent annually when the new rates took effect in 2007.

But many Ameren customers saw substantially larger hikes. ICC staff members told the commission in March that all-electric customers, also known as "space-heating" customers, in central and southern Illinois experienced increases of 88 percent to 170 percent in January.

The ICC, which is the state's utility-regulating panel, decided in March to investigate the rate-design structures of Ameren and ComEd. The commission's final order, which specifies what changes are being implemented, wasn't available Thursday.

But the ICC news release said: "The revised rates should help to mitigate the impact of extremely large bill increases for Ameren residential electric space heating customers and some commercial customers."

ICC spokeswoman Beth Bosch said the commission's goal "was to bring the space-heating customers more in line with the increases that other residential customers experienced."

"It's a reallocation of the costs ... in a way to make it more equitable so it doesn't affect that one group so significantly," she said.

For example, she said, small commercial customers of Ameren Illinois will see "a little bit of an increase."

Another change the ICC is implementing involves widening the gap between so-called "winter rates" and "summer rates" that customers pay for electricity. As a result, customers who heat their homes with electricity will pay lower rates in the winter, when they use a lot of electricity, and higher rates in the summer, when power consumption likely decreases, Bosch said.

Earlier this year, after lengthy negotiations, state officials and representatives of the utility companies hammered out a $1 billion rate-relief plan for customers of ComEd and Ameren. Gov. Rod Blagojevich signed it into law in August.

Part of the agreement reduces the size of the rate increases that customers will experience for the next few years, even though they still will be paying more than in 2006. Some Ameren customers also are getting checks as partial compensation for the higher rates they have been paying this year.

Adriana Colindres can be reached at (217) 782-6292 or adriana.colindres@sj-r.com.

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