Wednesday, March 09, 2011
 
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Higher electricity rates could be coming

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[March 09, 2011]  SPRINGFIELD -- Residents in Illinois could see an extra $3 to $5 surcharge on their monthly electricity bills next year.

InsuranceThe state's two largest electricity providers, ComEd and Ameren, are advocating for a plan to give their delivery systems a $3.6 billion upgrade during the next 10 years by passing a surcharge on to customers.

ComEd's average customer would see an extra monthly charge of about $3, while Ameren's average customer would pay an extra $5 monthly. ComEd's extra charge was calculated to include savings the new grid would create, while Ameren's was not, according to representatives for both companies.

Both of these charges would be on top of any normal rate increases the utility companies would seek during the next decade.

"If we did not enact House Bill 14, rates will still go up, but Illinois will forgo smart grid and all its benefits. Three dollars per month buys a smart grid, and the benefits from the investment more than offset the costs," Anne Pramaggiore, president of ComEd, said Tuesday during a joint hearing of the Senate Energy Committee and the House Public Utilities Committee

Utility companies would recoup their investment in a smart grid -- an electricity network that uses digital technology to use energy more efficiently -- by altering the way they make rate changes. The new system would allow companies to set their rates annually. Those rates would stand unless a complaint was filed with or by the Illinois Commerce Commission within 45 days of the rate change.

Currently, companies present any rate increases to the Commerce Commission, which can then alter the increase to what it determines is fair.

The change "would provide more timely recovery of cost to serve our customers and more certainty to investors and lender," said Craig Nelson, senior vice president of Ameren Illinois.

Attorney General Lisa Madigan's office said the new proposal for how rate change is approached is akin to an automatic rate hike.

"It is an extreme proposal that will effectively leave the Commerce Commission, the attorney general and other consumer advocates on the sidelines as Illinois utilities automatically raise their rates year in, year out," said Paul Gaynor, chief of the public interest division in Madigan's office.

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Commerce Commission Executive Director Tim Anderson said that he too is opposed to the legislation in its current form. The commission has problems with several areas of the plan in its current form, including the rate change overhaul, Anderson said.

Nelson and Pramaggiore said the rate-setting system would be necessary to ensure the companies can get a return on their investment. Upgraded grids would allow customers to save money in the long run and make any blackouts short and more infrequent, according to Nelson.

State Rep. Dave Winters, R-Shirland, is a co-sponsor of the plan. A ComEd customer, Winters said he is part of a pilot program that uses some smart grid technology. On average, his bill is 27 percent lower than that of the average ComEd customer not in the pilot program, he said.

"On an average bill of say $100 a month, if you're looking at 10 to 15 percent savings, obviously 10 to 15 dollars back in the customer's pocket in exchange for the $3 in additional cost, I think that's a great trade-off that's not going to be available if we don't move to a smart grid for everybody," Winters said.

Modifications to the original proposal are being made to address some issues brought up Tuesday.

[Illinois Statehouse News; By ANDREW THOMASON]

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