ICC approves utilities' rate stabilization alternatives

Proposals offer electric consumers some financial relief         

[DEC. 22, 2006]  SPRINGFIELD -- State Sen. Larry Bomke, R-Springfield, applauded the Illinois Commerce Commission's consideration of two proposals introduced by AmerenCIPS and Commonwealth Edison that offer consumers the option for financial relief by phasing in electric rate increases over time.

The ICC considered these proposals on Wednesday, and Bomke says they can provide substantial economic respite for Illinois' electric consumers, while still ensuring reliable service.

The proposals introduced by ComEd and AmerenCIPS would allow customers to choose whether they would like their rate increase applied over a period of several years. Bomke explained that this would soften the economic impact for consumers and would also allow the utilities to collect the revenues needed to avoid blackouts and layoffs.

"I think it's important to note that Ameren and ComEd are offering the option of relief for Illinois residents," Bomke said. "The utility companies are obviously sensitive to the impact these rate increases will have on their costumers, but at the same time they have their own financial concerns that need to be addressed. I'm glad that the ICC considered the proposals and worked with these companies to address this situation in a way that was palatable to Illinois consumers, as well as Ameren and ComEd."

Ameren has proposed a voluntary plan offering an annual 14 percent increase over the course of three years (2007-2009) to their customers, including primary and secondary schools, some units of local government, and small businesses. Customers that volunteer for the program will be offered a below-market interest rate of 3.25 percent per year. Ameren also pledged to contribute $15 million to energy assistance programs.

In a similar proposal, ComEd has also offered an optional program that would cap bill increases to 10 percent in 2007, 2008 and 2009. However, if the capped increases do not cover the company's costs for those years, then customers who opt for the plan would have to pay back the difference, with interest, between 2010 and 2012. Customers that volunteer for the program will be offered a below-market interest rate of 3.25 percent per year. ComEd was also urged to contribute $30 million to conservation and renewable energy programs over the next three years.

Bomke explained that the Illinois Senate passed a proposal that would phase in electric rates over a three-year period, but the legislation stalled in the House of Representatives. House Bill 2197 did not allow for interest to be paid on the proposed rate increases.

"We were faced with the very serious reality that by Jan. 2, some consumers could see their electric rates climb by up to 40 percent," said Bomke. "The ICC is the only agency with the authority to consider these proposals to ensure a smooth transition for Illinois residents after the first of the year."

[News release from Sen. Larry Bomke]