Group joins Ill. AG in opposing rate decrease

Bryan Cohen Dec. 5, 2011, 1:26pm


CHICAGO (Legal Newsline) - Illinois Attorney General Lisa Madigan and the Citizens Utility Board filed a response on Monday to prevent a utility company from making a move that would lead to a potential $41.1 million electric rate decrease.

In November, Ameren filed a motion before the Illinois Commerce Commission asking to withdraw the $40 million electric portion of its power rate and natural gas-hike request, which started at $111 million but has been decreased to $90 million during the case.

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

"It's simply not fair for Ameren to duck out of a rate cut for its customers," David Kolata, the CUB executive director, 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 Madigan and the CUB, is the latest attempt in a year-long battle against the company's rate-hike request. The CUB estimates the company's proposal could cost customers as much as $100 a year. Ameren, which had profits of $657 million last year, has made more than $200 million in rate hikes for its Illinois utilities since 2008.

"The regulatory process is supposed to protect ratepayers' pocketbooks, not just corporate profits," Madigan said.

Ameren recently increased its dividend and its stock and is currently trading at a 52-week high.

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

The administrative law judge mainly agreed with consumer advocates in ordering the rate cut. The CUB and Madigan are now fighting to make sure that decrease materializes on customer bills next year.

The CUB is the state's leading non-profit utility watchdog organization. It was created by the Illinois legislature in 1983 to represent the interests of small-business and residential utility customers. Since that time, the CUB has saved consumers more than $10 billion by helping to secure refunds and block rate hikes.

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