Ameren says rates hikes allow for modernization plan designed to save millions of dollars in energy costs
From Illinois Business Journal news services
Ameren Illinois says rate increases approved this week will allow the company to move forward on modernization projects to boost the reliability of natural gas and electric infrastructure that will save utility customers more than $47 million per year on average.
“As a result of the improvements we’re making to the system, Ameren Illinois customers are benefitting from an estimated $47 million in avoided outage costs. For example, if we have fewer outages because our system is performing better, then we’re using fewer labor hours, equipment, and materials for repairs,” spokeswoman Marcelyn Love said.
Since the modernization program began in 2012, electric system projects such as the installation of storm-hardened utility poles, outage detection technology, and stronger power lines have resulted in a 17 percent improvement in reliability. When customers do experience an outage, Ameren Illinois is restoring power 18 percent faster on average than in previous years, the company said.
Natural gas improvements include replacing aging transmission and distribution pipes with corrosion-resistant material and upgrading capacity. More than 550 employees and an additional 1,507 contract workers have been hired to help implement the improvements to the electric and natural gas infrastructure in Illinois.
“By all measures, the electric and natural gas modernization plans are working for our customers and Illinois,” said Craig Nelson, senior vice president of Regulatory and Financial Services for Ameren Illinois. “Reliability is up, outages are down and good paying jobs are being created at a time when our state sorely needs them.”
The Illinois Commerce Commission sets delivery rates to enable utilities to recover the costs of capital used for infrastructure improvements, and to recover the actual costs of maintaining the distribution system that delivers natural gas and electricity to homes and businesses. As part of this open and transparent process, the ICC undertakes an eight- to ten-month review to validate that these costs are reasonable, prudent and provide customer benefits.
Delivery service rates make up the smaller portion of a customer bill. Supply cost, which includes energy and capacity, makes up the largest portion and is not part of the Ameren Illinois delivery rate. Both electric and gas supply costs are passed directly to customers without mark-up.
Beginning in 2016, the updates will add an expected $2 to $6 per month to typical residential natural gas bills and $2 to $7 per month to typical residential electric bills. The average rate for Ameren Illinois residential electric customers is expected to remain below the national average. Natural gas customers are expected to benefit from lower gas supply costs this heating season, which are down 20 percent from last year.
Ameren Illinois offers programs such as Budget Billing to help customers level out their monthly payments, and energy efficiency programs to help customers manage their energy usage and save money.
Additional information about the electric and gas delivery service rate cases is available at www.icc.illinois.gov. Information on energy saving practices and budget billing strategies are available at AmerenIllinois.com/programs. Information about improvements Ameren Illinois is making to the electric grid and natural gas distribution system is available at AmerenIllinois.com/forward.
About Ameren Illinois
Ameren Illinois delivers energy to 1.2 million electric and 816,000 natural gas customers in Illinois. Its service territory covers more than 1,200 communities and 43,700 square miles.
