Illinois House hearing investigates high electric rates

By The Associated Press

SPRINGFIELD, Ill. (AP) – Under siege from angry customers and lawmakers Tuesday, power company Ameren promised to provide at least some financial relief to consumers socked with huge electric bills since a rate increase took effect in January.

Ameren President Scott Cisel, speaking at a special Illinois House hearing where customers recounted bill horror stories, detailed an eight-point plan that included one-time rebates and new payment options.

He said the plan, much of which requires approval from the regulatory Illinois Commerce Commission, would give $20 million in rebates to residential customers that use the most electricity.

It also would provide more money to help low-income customers pay their bills and delay until April 1 any service cut-offs for customers who can’t pay.

“We have listened to our customers and to you about the real-life impact of the new electric rates and have come forward to do all we can to assist while still maintaining our financial credit rating,” Cisel told lawmakers.

Ameren’s announcement came after southern Illinois lawmakers pleaded with their colleagues to roll back electric rates as the House convened in a rare “committee of the whole” where the focus was on bills that have doubled, tripled or more for downstate customers of Ameren.

Some legislators greeted Ameren’s new plan with skepticism.

Rep. Roger Eddy, R-Hutsonville, said he and his constituents feel deceived by Ameren’s marketing that the increase would be much smaller than some consumers are seeing.

“I don’t know when to believe you folks,” Eddy said. “You better come up with something better, because this isn’t good enough.”

Electric rates jumped last month after lawmakers allowed a 10-year freeze on prices to expire. Ameren predicted its customers would see an average increase of roughly 50 percent, but some report far bigger jumps.

“We are in calamity. Southern Illinois is in crisis,” said Rep. John Bradley, D-Marion. “Roll back the rate. Put in the rate freeze and save southern Illinois.”

The House heard from dozens of state and local officials, consumers and advocacy groups. The goal was to find out why increases were so much higher than predicted and what, if anything, could be done.

Residents were warned for months that electric rates would go up in 2007, as the 10-year rate freeze expired. Lawmakers froze rates in 1997 as part of a plan to deregulate the industry and allow competition to develop. But competitors that might have driven down electric rates never entered the Illinois market.

Lawmakers last fall considered extending the rate freeze or phasing in higher rates over several years, but they ended up taking no action. The higher rates took effect Jan. 1.

Lawmakers find themselves in a difficult political position this spring. The hearing gave them a chance to show angry constituents that they’re serious about the problem, even as the bills continue to arrive in mailboxes.

Legislators used early testimony to point fingers at the utility companies, other government officials and even themselves.

House Speaker Michael Madigan, D-Chicago, also excoriated ComEd, which serves the Chicago area, and the regulatory decisions made by the Illinois Commerce Commission.

Madigan said consumers were victimized by the system set up by the Commerce Commission last fall to set the new rates. He also said it’s unfair for utility companies like ComEd to build up profits by buying and selling power among themselves while their customers struggle.

“It’s not right,” Madigan said. “It should not be tolerated by the government of the state of Illinois.”

House Republican Leader Tom Cross, R-Oswego, and some of his colleagues called for Gov. Rod Blagojevich to help broker a compromise.

Blagojevich has supported a plan backed by House Democrats to extend the rate freeze by three years, but that has been blocked by Senate President Emil Jones. Blagojevich issued a statement saying he will continue to watch lawmakers’ progress, but Cross said that’s not enough.

“He can bring the people together that can change what’s gone on in this state,” Cross said.

Part of the spike was caused by the end of a special discount rate for customers whose homes use nothing but electricity. But Bradley said that doesn’t adequately explain why one customer complained of seeing their monthly bill jump from about $54 to $760.

Rep. Mike Bost, R-Murphysboro, urged the Commerce Commission to step in and use its emergency powers to quickly lower rates.

ICC officials cautioned that process would take much longer than a few days, but the commission planned to look at what it could do to get involved.