By: Joseph Bustos |
Ameren Illinois customers can expect to see increased utility bills beginning next year.
The Illinois Commerce Commission on Wednesday approved delivery rates for Ameren’s electricity and natural gas services.
The typical residential customer can expect to see their electricity bills increase by $2 to $7 a month beginning in 2016. Typical residential customers who receive natural gas service from Ameren will see their bill increase by $2 to $6 a month.
Ameren spokesman Brian Bretsch said he expects most metro-east customers to see increases closer to $2 a month for both natural gas and electricity delivery.
Ameren said its customers are expected to remain below the national average for electricity rates.
Natural gas customers are expected to benefit from lower supply costs during the winter, which are down about 20 percent, Ameren said.
Money from the rate increases is helping pay for Ameren’s ongoing modernization program, the utility said.
In 2016, Ameren plans to spend $67 million on natural gas line infrastructure work, said Tucker Kennedy, director of communications for Ameren Illinois.
Next year, Ameren expects to spend $100 million in electricity infrastructure work, Kennedy said.
Ameren expects the natural gas rate increases to bring in about $45 million more next year, the ICC said. In January, the utility initially requested an increase of about $55 million.
There were changes or reductions to Ameren’s initial request in the areas of uncollectible expenses, asset retirement obligations, gasoline and diesel fuel cost, lobbying expenses, payroll tax, customer advances, among other things, the ICC said in a news release.
Ameren’s natural gas delivery rates were last changed in January 2014.
The new electric delivery rate is expected to bring in about $106 million more to Ameren next year.
Ameren initially proposed in April a $110 million increase, “but adjustments were made by the Commission to the company’s advertising expenses, employee recognition expenses, and cash working capital,” the ICC said.
Electric rates are determined through a formula set in the 2011 Energy Infrastructure Modernization Act.
The Citizens Utility Board was pleased the ICC did not grant Ameren’s full requested amount, but was still disappointed in how much the utility received. CUB said it plans to challenge both rate hikes.
“While we are pleased Ameren didn’t get as much as it wanted, CUB is disappointed that Ameren still received more than it proved it needed or deserved,” CUB Executive Director David Kolata said. “For Central and Southern Illinois consumers, receiving news like this is akin to receiving a big lump of coal this holiday season … Ameren received the higher electric rates to pay for major upgrades to its power grid. If done right, these upgrades should pay for themselves through customer benefits in the long run. CUB will continue to push Ameren to build a more reliable and less costly power grid. Customers are paying the bill for these upgrades, so we deserve the benefits.”
Ameren’s natural gas improvements have included replacement of aging transmission and distribution pipes with corrosion-resistant material, and upgrading capacity.
Bretsch said the utility is in the midst of replacing older gas lines, such as a 40- to 50-year-old line near the Gateway Motorsports Park.
On the electric side, Ameren is putting in a new substation to help meet future residential growth near Collinsville, Maryville and Troy, as well as putting in a new transformer for a substation that serves East St. Louis.
Ameren has been installing storm-hardened utility poles, outage detection technology and stronger power lines, which has improved reliability by 17 percent, the utility said.
The outage sensors have helped Ameren restore electricity to an affected area 18 percent faster, Bretsch said.
“By all measures, the electric and natural gas modernization plans are working for our customers and Illinois,” said Craig Nelson, Senior Vice President of Regulatory and Financial Services for Ameren Illinois. “Reliability is up, outages are down and good paying jobs are being created at a time when our state sorely needs them.”
Delivery rates for natural gas and electricity were set by the ICC to allow utilities to recover the costs of infrastructure improvements and the costs of maintaining the gas and electric distribution systems.