North American Windpower: Rate Relief Package Promises More RE For Illinois Customers

by NAW Staff on Wednesday 25 July 2007

Ameren Corp. and the Ameren Illinois utilities have unveiled a $488 million rate relief package that includes a mandate for adding renewables to the utilities' generation portfolio. The broad-based assistance is part of a more than $1 billion agreement that will reduce electric bills for every residential customer of the Ameren Illinois utilities.

Assistance under the package will help offset a one-time rate increase that was implemented after rates were frozen for 10 years in Illinois. The rate freeze, according to the Illinois Commerce Commission (ICC), began in 1998, when utility rates were reduced by as much as 20% and frozen until the end of last year as part of the state's electric deregulation process. With the cessation of the rate freeze, residential customers saw rate increases of between 40% and 55% annually, while many all-electric customers saw an increase of up to 100%.

As part of the rate relief package, the utilities have promised to "make a strong commitment to energy conservation programs" and obtain an undisclosed percentage of their electricity from renewable resources. While Illinois has not set a renewables mandate, a 2001 law set a goal of obtaining 15% of the state's power from renewables by 2020.

The utilities say they have endorsed legislation that creates the Illinois Power Agency, which will be responsible for designing a system to procure power for the Ameren Illinois utilities and Commonwealth Edison beginning in June 2009. This process will be subject to the approval of the ICC. The existing auction format for power procurement will be replaced in June 2008 with independently monitored requests for proposals overseen by the ICC. Furthermore, the utilities have agreed to enter into contracts to lock in the cost for a portion of their power requirements from 2008 to 2012 to minimize potential fluctuations in future price increases.

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