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[Posted by Barton Lorimor]
* Ameren’s request for a $130 million Illinois rate increase has drawn all sorts of criticism, especially after the company posted its 2009 profits. Despite the recession, Ameren finished the year with profits of $612 million - just $3 million shy of 2008…
The $612 million profit for 2009 compared to $615 million in 2008.
Ameren also had an amazing fourth-quarter…
Net income improved to $79 million, or 34 cents a share, from $57 million, 27 cents, in the same period a year earlier
* The big story, though, is how Ameren is faring in Illinois…
[Ameren’s Illinois earnings] from these utilities jumped 150 percent during the past year, from $51 million in 2008 to $127 million in 2009. That primarily is due to a rate increase that took effect in October 2008, along with lower operations and maintenance expenses. […]
The question for the [Illinois Commerce Commission] is how much profit in Illinois is too much? [Emphasis added]
An ICC administrative law judge has answered that question. He’s calling on Ameren to scale back the utility’s $130 million request to $56 million…
The 317-page proposal… suggests Ameren actually lower natural gas delivery rates for two of its three utilities. Electricity delivery rates would go up for all three.
Now, the Illinois Commerce Commission will review Administrative Law Judge John D. Albers’ report and make a final decision by the end of April. Only then would any rate changes kick in.
Even with Albers’ proposed reduction, Ameren still likely stands to increase its profits. AARP responds…
The Administrative Law Judge’s finding that Ameren should lower its rate hike request to $56 million is further proof that Ameren’s $130 million rate request was excessive. But Ameren’s request for a rate increase, even at $56 million, is still wrong.
State Rep. John Bradley, a Marion Democrat, quickly came out against Ameren’s rate increase request…
“Communities throughout Southern Illinois are facing the highest unemployment rates in recent history,” the Marion Democrat said. “Those workers who have managed to keep their jobs are facing cutbacks to their hours and benefits. For Ameren to ask these people to fund an increase so that their executives can see another year of growing profits is frankly appalling.”
Bradley was very vocal against Ameren’s request in 2008. He even took tour buses of people in and around his district to Springfield to attend commerce commission hearings.
* Meanwhile, the recent revelation that ComEd intends to ask the state for another rate increase has consumer advocates screaming at utility companies. Exactly how much ComEd will ask for is still unknown, but that hasn’t stopped the Citizens Utility Board and other consumer advocates from screaming at the state’s largest electricity provider.
“It’s terrible timing with the economy the way it is,” said Jim Chilsen, spokesman for CUB, a consumer advocacy group founded by the Illinois General Assembly in 1983.
Illinois consumers will also see electrical bills rise this spring as a result of a 2009 law designed to help people struggling financially to make utility payments.
Payments for lower-income families are based on a sliding scale that’s related to their income, one of several provisions in the 2009 law.
CUB is using an ongoing review of the last ComEd rate increase as a reason to hold off this request…
“The ink on the last rate hike isn’t even dry,” Chilsen said, adding, “and now we get disturbing news that ComEd’s filing with the Illinois Commerce Commission to ask for more.” ComEd said it understands the impact a potential rate increase may have on customers. “That’s why last year, instead of filing for a rate increase, we tightened our belts and reduced our budgets by approximately $200 million,” ComEd said in a prepared statement.
* Related…
* Shenanigans On The Senate Environment Committee?
posted by Rich Miller
Monday, Mar 8, 10 @ 10:39 am
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Those guys always want more, and will drown you in paper and numbers justifying it until your brain is numb.
Not right now, guys. Everyone’s cutting back. Enjoy your current profits.
Comment by wordslinger Monday, Mar 8, 10 @ 10:55 am
If Rep. Bradley was really sharp he would announce that he plans to have Impeachment resolutions ready to be filed against any ICC member who supports the proposed increase. He should also announce that if the increase is approved, he will file an amendment to zero out of the budget all funding for the ICC (save for the salaries of the Commissioners) for the coming year. The argument for that would be that Illinois residents can get screwed by the utilities just as easily without also having to pay for a body to rubber-stamp increases!
Comment by fedup dem Monday, Mar 8, 10 @ 10:56 am
@fedup dem: Actually, after the ICC approved Ameren’s rate increase last year Rep. Bradley filed a bill that would make drastic changes to the ICC including publicly electing non-partisan board members. HB 4255.
http://www.ilga.gov/legislation/BillStatus.asp?DocTypeID=HB&DocNum=4255&GAID=10&SessionID=76&LegID=47133
Comment by LN Monday, Mar 8, 10 @ 11:05 am
I recently watched “The Informant!”, and reading this post really got the old hamster wheel turning. Maybe it’s time for CUB to take their concerns to the USDOJ and ask U.S. Attorneys Courtney Cox, Roger Heaton & Patrick Fitzgerald to open an investigation, which would in turn lead to an (albeit small) antitrust case with the end game of breaking up Ameren and ComEd’s grasps on Illinois. Ameren was allowed to essentially swallow up UE, CILCO, IP and CIPS. Their initial motive should have been enough of a red flag. Their current motives should certainly be scrutinized and possibly even bring action against the company. Ameren’s ownership of four other major utilities allows them to set prices and keep the market clamped in their favor. It is amazing nothing bigger has been done to stop them.
Comment by Team Sleep Monday, Mar 8, 10 @ 11:05 am
Jacobs and Clayborne have been toadies for the utilities and polluters since they came to the Senate. Jacob’s dad, the former Senator, lobbies for ComEd and works out of his son’s office. A conflict of interest if there ever was one, and a mususe of state property.
This misuse of the committee should come as no suprise.
Comment by Tom Joad Monday, Mar 8, 10 @ 11:12 am
Well said Tom…these two jamokes need an eye or four kept on them please…
Comment by Loop Lady Monday, Mar 8, 10 @ 11:20 am
Chicago charges up to a 15% tax rate on electricity usage for individuals. I guess Bradley only cares about the poor people downstate, not the poor people in Chicago getting gouged by Chicago’s outrageous electricity tax. I get a kick out of all these progressive/liberal/Democrats pretending to care about the little guys having to pay more for electricity, except when it is their outrageous tax policies that hurt the poor.
Call up CUB and ask them for a list of the tax rates paid on utilities in Illinois. They won’t have it, because they don’t care if poor people have to pay unavoidable, high electricity taxes.
Comment by TaxMeMore Monday, Mar 8, 10 @ 11:29 am
Are public utilities non-profit? Are we expecting these companies to be run for free? When we see tough economic times, are we going to start demanding that these private companies become philanthropic?
What gives? Why the anger over providing a public utility and getting a profit? And what does it mean when it is reported as a “record profit”?
Once again, the ICC doesn’t allow private utilities to exceed a profit level of 6-7%. That is a low profit line that has been in place historically based on whether we can get full service from these private utility companies. When profits are too low - they can’t do their jobs and provide the utility. When they are too high - then it appears that the utilities are scalping customers via their power monopoly. So, we have a state agency that ensures the balance.
Yet, we have politicians who want to make hay out of this. They want to fingerpoint, and claim that any business that is overseen by a governmental agency, should be forced to sacrifice so that the politicians and their failures don’t cost them their political elections.
The utilities always ask too much. The ICC always returns to the historic base equation of profit percentages. It is all a big game with rules that have been decided generations ago. No one is getting screwed or the complicated relationships between customer, provider and government will collapse, giving us NO utilities.
Comment by VanillaMan Monday, Mar 8, 10 @ 12:03 pm
Vanilla man, no they aren’t public utilities. They’re private monopolies. If they were publicly owned utilities we’d have better service and lower rates.
Illinois would be better off if Ameren were driven out of the state and their executives hauled into court.
Comment by Will Monday, Mar 8, 10 @ 12:45 pm
“Communities throughout Southern Illinois are facing the highest unemployment rates in recent history,” the Marion Democrat said. “Those workers who have managed to keep their jobs are facing cutbacks to their hours and benefits. For Ameren to ask these people to fund an increase so that their executives can see another year of growing profits is frankly appalling.”
Hmmm! Does Senator Bradley consider himself to be one of those getting less pay and benefits?
Typical political hypocrisy.
Comment by Joe Monday, Mar 8, 10 @ 12:47 pm
“If they were publicly owned utilities we’d have better service and lower rates.”
We’d be more likely to have contaminated Crestwood government water statewide with everyone paying a 15% electricity tax rate with the way politicians run things in Illinois.
Anybody charged with a crime yet in Crestwood for that publicly owned utility poisoning its residents, Will?
Illinois would be better off if Democrats were driven out of the state and their party leaders hauled into court.
Comment by TaxMeMore Monday, Mar 8, 10 @ 1:06 pm
If Ameren is such a huge profit machine then why is it’s stock price around half of what it was 2 years ago along with. Smaller dividend?
Comment by Sick of it! Monday, Mar 8, 10 @ 1:42 pm
They’re private monopolies.
You really haven’t a clue, do you? You must be basing your views on the Springfield in The Simpsons. Dude - that’s a cartoon. Anyone can own stock in these companies, which means that they are not private. Since 1997, with Electric Deregulation, they are also not a monopoly either.
You must not have electricity, or you’d be able to watch television news and discover these things.
Comment by VanillaMan Monday, Mar 8, 10 @ 2:03 pm
Meanwhile let’s all buy into the StateWideTom.Tribune plan to weaken the caucuses so there will be no one to stand up to these special interests….good timing SWTom
BTW anyone standing around BillTheBuilder victory tour to see if he is against the rate hikes….hmmm
How about LilLumberJack???? Yea or nay
Comment by CircularFiringSquad Monday, Mar 8, 10 @ 2:03 pm
Technically AMEREN/UE may not be a monopoly but, south of I-80 they have the lion’s share of customers by far. It also is not an open marketplace either. If I choose to live in Taylorville, my electric and gas are furnished by AMEREN/UE - I have no choice in providers. Finally, the ICC has shown time and again that they are political appointees shilling for the utility industry. If the ICC were even handed there would be no need for CUB to protect consumers’ interests.
Comment by Sangamon Sage Monday, Mar 8, 10 @ 3:12 pm
Bradley should have thought about that when he supported the Ameren bailout 3 years ago.
The Republicans railed that there was NO language in the bill to prevent future rate hikes. I believe this is the second rate hike request since then.
Of course, I’m sure Bradley will forget to mention this as he wines for the next several weeks.
Comment by reality hits home Monday, Mar 8, 10 @ 4:19 pm
VanillaMan - I would like you to tell me how to take advantage of deregulation. Of course it turns out that didn’t work. Even if I could buy power from some other source, I would still have to pay Ameren for the delivery of that power. And after 13 years, I still can’t buy power from any other source. It might be a public company, it might not be a monopoly, but they have captive customers. Call it what you want.
Part of the problem is people like me. I have cut my power usage by 30%. The unintended consequences of energy efficiency is reduced demand and reduced income for the power companies so they have to increase their rates.
Comment by Retired State Employee Monday, Mar 8, 10 @ 6:04 pm
–You must not have electricity, or you’d be able to watch television news and discover these things.–
VMan, that’s hilarious. I have no doubt that television news (Fox Hillbilly) is your intellectual lifeline.
I’m sure they have lots of stories on public utilties. Right up your alley, slick.
Comment by wordslinger Monday, Mar 8, 10 @ 7:04 pm
I don’t like these utilities tub thumping for more conversion to natural gas. They will want to run their new plants on it. The natural gas has to be piped in from out of state, and is and will be subject to wild market fluctuations by the actions of speculators. Is it better than coal, yes, but not by all that much.
All I ever hear from my friends living in Ameren country is tale after sad tale of how this big company bought up the small local utility and basically stripped it for liquid assets, without going out to do the extensive updating and maintenance that had been deferred by the failed utility. When those ice storms and tornadoes hit down south, the Ameren-served areas were down more often and for much longer than other utilities, my friends tell me it is because the old distribution - the poles and wires - were worn out and thus failed more extensively and took longer to repair.
Comment by Some Guy Monday, Mar 8, 10 @ 8:22 pm
A move towards a more customer focused sector is what the utility industry needs. Only when the Comed’s and Ameren’s of this world realize that their role is to provide customers a service will they start buckling up. Retail/the market model, which is being rolled out in the supplier sector, is seriously required in the generation sector.
Comment by Seyi Monday, Mar 8, 10 @ 11:01 pm
Business owners should turn to innovative new companies to fight these rate increases. For instance, Power2Switch allows companies to reduce electricty rates by offering alternatives to Ameren and Commonwealth Edison. The service is completely free and offers a number of ICC registered suppliers in Illinois. Check them out at: http://www.power2switch.com
Comment by Tim Monday, Mar 8, 10 @ 11:13 pm