Ameren Illinois seeks to raise rates as part of natural gas system upgrade plan

Ameren Illinois wants to raise delivery rates as part of a plan to recover costs of modernizing its natural gas system and delivering natural gas to homes and businesses in Central and Southern Illinois.

The plan was outlined today before the Illinois Commerce Commission.

If the ICC approves the plan as filed, the typical customer using 745 therms annually will pay on average about 24-cents per month more on the natural gas delivery portion of their bill beginning in January 2019.

“This plan will enable us to continue investing in a more modern natural gas delivery infrastructure while strengthening pipeline safety,” said Richard Mark, chairman and president, Ameren Illinois.

Under the company’s natural gas modernization plan, Ameren Illinois is replacing older, mechanically coupled steel distribution pipeline with polyethylene gas pipe that is resistant to corrosion and lasts for decades. Transmission pipelines, regulator stations and other natural gas distribution equipment and technology are also being upgraded or replaced. Since Ameren Illinois launched its natural gas modernization program in 2015, the company has replaced more than 118 miles of mechanically coupled steel pipeline throughout its 43,000-square-mile service territory.

The proposed delivery rate adjustment was positively impacted by the federal tax cut that went into effect in December. Customers are also expected to benefit from the continued low cost of natural gas supply. Natural gas supply costs have dropped from about 58-cents per therm in 2014 to about 42-cents per therm in 2018 – a decrease of nearly 30-percent. Ameren Illinois purchases more than half of its natural gas supply in the summer, when costs are lower, and stores it underground for customers to use in the higher-demand winter months. The cost of gas itself is passed on to customers directly, with no markup or profit for Ameren Illinois

“We’re pleased to make these system enhancements at a time when the overall cost picture is decreasing,” said Mark.

This is the first adjustment to natural gas delivery rates Ameren Illinois has requested in three years. The ICC will review the reasonableness and prudency of the company’s projected infrastructure development and operational costs and make a decision in December of 2018.

In addition, Ameren Illinois has several regulatory proposals that have been approved or are pending at the Commission that will help Ameren Illinois electric customers realize energy and cost savings in 2018.

• Energy Efficiency Refund – Approximately $41 million will be returned to Ameren Illinois’ electric customers in February, 2018 due to termination of an energy efficiency rider. The typical customer using 10,000 kWhs annually will receive a bill credit of approximately $13.
• Electric Delivery Rate Reduction – The ICC recently approved Ameren Illinois’ request to decrease electric service delivery rates by $17.3 million, saving the typical residential customer $1.70 per month on their 2018 electric bill. It’s the second consecutive, and fifth overall electric rate decrease since the Energy Infrastructure Modernization Act – or Smart Grid Bill – was passed in 2011.
• Voltage Optimization Energy Savings – Voltage Optimization technology reduces end-user electricity consumption by enabling Ameren Illinois to operate the grid more efficiently. Over a seven-year implementation period the typical residential customer served by an optimized circuit will use an estimated 2.4% less energy per month on average. Some customers will start to see savings on their energy bills in 2019, and each year for the next 15 years.