Citizen’s Group Says Utilities Seek Rate Hike Through Legislature

March 26, 2013

Illinois legislators already passed a law that lets ComEd and Ameren charge higher rates for electricity.  Now, natural gas companies want the same treatment.

The Citizens Utility Board said a new measure in the Illinois legislature would let utilities hit customers with more than $400 million in gas rate hikes over the next decade. CUB estimates that comes out to about $500 over the next 10 years for the average customer.

The watchdog group and the state’s AARP chapter are urging citizens to call sponsors of the bill (Senate Bill 1665/House Bill 2414), saying Ameren, Peoples Gas, and North Shore Gas are essentially seeking a hike in the gas tax, without proving they need it.

CUB’s Director of Governmental Affairs, Bryan McDaniel said the bill means no 11 month review process before the Illinois Commerce Commission, and Ameren can determine how much to spend if the bill passes.

“This formula would take away all that opportunity to litigate, and fight out these issues to try to save Illinois consumers money," McDaniel said.  "Still making sure the gas system is functioning as it should, but at the same time, making sure consumers aren’t gouged in the process."

Both CUB and Illinois’ chapter of AARP want consumers to contact legislators opposing the measure, which was just introduced in committee. 

AARP member Frank Price, of Springfield, said the companies are trying to bypass state regulators, so they can secure higher profits.

"This is a way to circumvent a regulatory process. It's not just another avenue for trying to help a business make money," Price said. "It's an avenue for avoiding the need to justify their rate increases.  And they affect all of us, from Rockford to Cairo."

Sponsors include Sen. David Koehler (D-Peoria), but none from east central Illinois.

Ameren spokesman Leigh Morris said the measure would do for natural gas what a 2011 bill did for modernization of the state’s electric grid. Morris said CUB is wrong in saying the state commerce commission is left out of the process of reviewing any higher rates.

“The law, if enacted, would allow a utility to recover any reasonable, prudently occurred costs, and those are determined by the Illinois Commerce Commission," he said. "It’s a very transparent process, there’s no hidden agendas here, and there’s nothing automatic about it.”

Morris said the average Ameren customer's heating costs will go up by $3.70 in the first year. That compounds every year. So, in a decade, consumers will see an additional $37 tacked onto their natural gas bill.

Morris also noted when the 2011 ‘smart grid’ bill went into effect, the first filing before the ICC sought a lowering in electric rates. The new bill would also go for pipe work infrastructure, which Morris said would take longer and cost more without the bill’s passage.

Story source: WILL