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Ameren Illinois CEO Scott Cisel followed up his dramatic offer of re-regulation and dumping the controversial reverse power auction with what will assuredly be seen as a take it or leave it offer to the General Assembly…
Ameren’s Illinois electric utilities, besieged by angry customers and lawmakers over dramatic rate hikes, offered on Monday to reinstate a canceled relief package designed to ease the pain of ratepayers — but only if the Legislature stops threatening to roll back the new rates.
Not gonna happen. The “relief” package was way too small. There’s a legislative hearing scheduled for today, so expect the Ameren bigs to get grilled to a crackly crunch.
Ameren Illinois could not afford to return to electric rates charged before they were unfrozen in January while discussions about possibly re-regulating the industry occurred, a company official said Monday.
It also is unlikely, because operating costs increased too much while the rate freeze was in place, that re-regulation would enable the rates to fall that low again, said Scott Cisel, CEO of Ameren Illinois.
But re-regulation could be the best long-term solution for price stability, Cisel said during a conference call Monday with the media.
And I loved this one…
Cisel said the perception many customers have that Ameren Corp. is draining cash from its Illinois utilities to keep its profits high is incorrect. He said more than 70 percent of Ameren Corp.’s income is from its electric generation unit in Missouri, which cannot be expected to bail out the utilities in Illinois.
Except that Ameren’s Missouri rates are lower than ours, so we’re subsidizing them.
The Pantagraph took a different tack…
House Speaker Michael Madigan is predicting that high power bills could begin dropping in the “pretty near future.”
While he didn’t name a specific date for when consumers might see some relief from rates that have skyrocketed since a decade-long rate freeze ended Jan. 1, a spokesman for the Chicago Democrat said Monday that pressure is building on Ameren Corp. and ComEd to address the issue.
A key factor in Madigan’s assessment came Sunday when Ameren Illinois President Scott Cisel said it might be time for the state to again regulate utility companies. […]
“What we know is that the prices are way beyond the company needs to make a profit,” Brown said. “My guess is that we’ll be going back to rates probably around the freeze in the pretty near future. We’re getting closer to a real number.”
Squeezing major companies is a long process, and it ain’t over yet.
Alton Telegraph: Ameren officials could feel the heat on two fronts in Springfield today.
Sun-Times editorial: Electricity rate-fixing charges need to be investigated
posted by Rich Miller
Tuesday, Mar 20, 07 @ 8:23 am
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“Except that Ameren’s Missouri rates are lower than ours, so we’re subsidizing them.”
This is incorrect. Their cost of service in Missouri is lower than in Illinois. I was in California last week and gas prices were higher than here. Does that mean California is subsidizing Illinois gas prices?
Ameren has a lot work to do to fix things, but figuring out what was done wrong needs to recognize and appreciate the differences in the legal and regulatory situations between the states.
Comment by Anon Tuesday, Mar 20, 07 @ 9:00 am
It’s not just delivery costs, anon, it’s the price charged by generators.
Comment by Rich Miller Tuesday, Mar 20, 07 @ 9:01 am
Like the pigs at the all-you-can-eat buffet who swallowed the entire table and made themselves sick, now Ameren wants us to put them on Weight Watchers amd refill the buffet table for round 2.
Time for slaughter little piggies!
Comment by VanillaMan Tuesday, Mar 20, 07 @ 9:48 am
Rich,
The regulatory treatment of costs in a fully regulated state are totally different than they are in a deregulated state. Federal and state law govern those relationships. Ameren MO might as well be Ameren Alaska from a regulatory perspective. Just for perspective, Indiana rates are about 50% cheaper than those in IL because Indiana hasn’t deregulated. Deregulation has become code for “increase the value” of electricity and let us “recover” this new value. As the Speaker said, the system is “rigged” against small electric users. If Cisel wants to reregulate, let him. The key thing to look for in that deal is how much we the ratepayers are going to have to pay to get those coal plants back into the same company. Dynegy, Dominion and Vermillion all now own former Ameren coal plants that are providing power for Ameren’s customer load. Those plants are flush with cash and will be very expensive to repurchase.
This entire thing is such a mess. Bottom line, we’re not getting an easy solution and rates in Ameren and ComEd’s territories are going to be higher than they’ve been for the last 10 years.
Comment by Anon Tuesday, Mar 20, 07 @ 10:24 am
Are Amaren’s rate per Kwh less than ComEd’s rate per Kwh? If not, why is is that it is the Amaren customers that are screaming bloody murder?
Comment by cermak_rd Tuesday, Mar 20, 07 @ 12:05 pm