Just when you think it couldn’t get any worse, Ameren drops this bombshell: a $110 million rate-hike request to ostensibly pay for upgrades to the power grid.
CUB Executive Director David Kolata had this to say:
If done right, Ameren’s power grid improvements have the potential to benefit all its customers, but that doesn’t mean those customers should have to pay exorbitant rate hikes. CUB will carefully review Ameren’s request and we will do everything we can to eliminate unjustified spending and reduce the rate increase as much as possible. CUB intends to hold Ameren to its promise of delivering a more reliable and affordable power grid for all consumers.
Ameren filed the rate-hike request on April 24. If approved, it would take effect in January 2016. Ameren estimates total bill impacts for “average” users (10,000 kilowatt-hours a year for general use) will be an increase of roughly $2 to $7 per month.
Here’s some more background information on the request:
• This proposal for new delivery rates is in accordance with passage of the “Energy Infrastructure and Modernization Act,” or the “smart-grid bill,” in 2011. The new law uses a formula to determine Ameren rates each year to pay for $625 million in system upgrades.
• In April 2015, the Illinois governor signed into law a bill that extended formula ratemaking by two years—from 2017 to 2019.
• The rate hike affects delivery charges—what customers pay to have the electricity delivered to their homes. Those charges take up about a third to a half of the bill. (The rest of the bill is taken up by the cost of the electricity itself.) Since this increase involves delivery rates, all customers will pay the higher rates—even those with an alternative electricity supplier.
• CUB did not support the smart-grid legislation, citing too few consumer protections. The group is now focused on reducing the yearly rate hikes as much as possible and pushing electric utilities to improve the power grid in a way that cuts future electric bills and improves reliability. CUB will take part in yearly reviews of Ameren’s spending and will protest what it judges to be unjustified capital and operational expenditures.