Ameren delivers bad news for central Illinois users

AmerenIP and CIPS customers could get hit twice

[August 18, 2008]  It appears everyone in central Illinois will be hit with a larger bill to heat their homes and businesses this winter. There is a strong chance that customers of AmerenIP and CIPS will get a double dose of charges added to their bills.

Illinois administrative law judges recommended recently that Ameren Corp.’s Illinois companies be allowed to increase rates for delivery of natural gas and electricity by $163.5 million. The utility had asked for an increase of $207 million. This recommendation moves on to the Illinois Commerce Commission for implementation or changes.

The raise in rates would affect consumers using AmerenIP and AmerenCIPS by as much as 29 percent, with a small decline for AmerenCILCO users.

But just when AmerenCILCO users may think they have dodged an increase in their bills, Ameren officials advised on Thursday that they project 20 percent to 30 percent increases in the cost of natural gas this coming winter. The projections are based on a spike in natural gas futures well before the winter heating season begins.

Ameren advised that they have no control over the price of natural gas and are simply passing those costs on to consumers.

Ameren justified their claims of needing additional revenues on a $13 million net loss in their second quarter in the AmerenIP and AmerenCIPS units of the corporation.

However, Ameren financials show that AmerenCILCO has posted a $24 million profit for the first six months of 2008. Company financials also show that for the first six months of 2008, Ameren revenues from all units hit $344 million, compared with a profit of $266 million in the same period for 2007.

The company states that additional revenues are needed to pay for upgrades and infrastructure improvements in their efforts to continue to supply reliable energy to the people of central Illinois.

[AP, Ameren, Citizens Utility Board, LDN staff]