Electrical rates hike in Illinois

By Matt Spartz

Editor’s Note: This story originally read that electricity rates will go up in January because of the end of a rate freeze. While no extension has been approved by the legislature and the governor, there are bills that could potentially extend the rate freeze that are still being debated. The Daily Illini regrets the error.

Electricity rates could go up substantially in January for all Ameren customers if the 10-year electricity rate freeze ends in Illinois.

Ameren has developed an optional program meant to spread out the costs of the estimated 40 percent rate increase for residential customers.

This program, known as the Residential Customer Elect Payment Plan, would increase electricity rates by no more than 15 percent for each of the next three years. Then customers would pay the new full cost for electricity, which will be about 40 percent more than it is now, plus a proposed 6.5 percent interest rate for each year for deferred costs from the first three years.

Renters in the Champaign-Urbana area need to think ahead to whether or not they will be living in an Ameren service area in upcoming years before deciding to use this phase-in option. In the event that they move out of Ameren’s service area, they will be stuck with a bill covering the costs that they deferred.

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“(The specifics) have not been approved yet,” said Leigh Morris, a spokesman for Ameren Corporation. He said the interest rate has not yet been set, but Ameren is working to ensure that it is “going to be as minimal as possible.”

If a renter decides to use the phase-in plan, they will be charged at the new rate the first year, no more than 15 percent higher than the previous rate. If they continue the current lease the next year, or another lease that still uses Ameren services, they will keep paying the new rate the following year.

However, if the same renter were to move out of Ameren’s service area the next year – such as moving back home after graduation – they would still owe the deferred amount.

“In the case of a renter who terminates their service with us at the end of a lease, and would not continue as a customer, then the entire amount would be due on their final bill,” Morris said. “If someone knows they are going to be moving in May and they are not going to be a customer, then they probably should not take the deferral program.”

Most renters pay these utility costs directly to Ameren and do not have them included in their rent, said Michael Jay, director of operations for Campus Property Management (CPM). This would mean that renters need to make a decision on a payment plan themselves.

“It’s unfortunate that they couldn’t curb the (electricity rates),” Jay said.

For anyone enrolling in the phase-in program before Apr. 23, 2007, they would see the new rate applied beginning in May 2007, according to the PR Newswire. The deadline to enroll is Aug. 21, 2007.

If residents do not enroll in the phase-in program, they will begin paying the full increased rate in January 2007.

“Our total electric bill is probably 100 bucks a month, split between four other people,” said Nick Glogowski, senior in LAS. With electric rates increasing next year as much as 40 percent, this total could increase to as high as $140.

“It wouldn’t really affect me that much,” Glogowski said. “It would make my spending money go down for the month but it’s not really that big of a deal.”