SPRINGFIELD, Ill. – State regulators are demanding answers from Ameren Corp. about its threats to lay off workers, reduce maintenance and halt an effort to help customers hit by huge rate increases.

The Illinois Commerce Commission sent a letter Wednesday questioning why the power company would have to take those steps just because its credit rating has been downgraded to “junk” status by an investing service.

The commission says Ameren got a $96.7 million rate increase last year that should cover service costs, regardless of the company’s credit rating. Layoffs and service cuts are “not justifiable … when such costs are reflected in the new rates,” ICC Executive Director Tim Anderson wrote to the company.

He gave Ameren until Friday to answer the commission’s questions.

Ameren spokesman Leigh Morris said the company had no immediate response because it needed to review the letter Wednesday afternoon.

But he said the lower credit rating has an immediate impact on the company because it raises the cost of borrowing money and making purchases. Lenders and suppliers respond to the lower rating by demanding more from Ameren, he said.

“If you’re spending more money on debt service, you have less left to spend on your core business,” Morris said.

David Kolata, executive director of the Citizens Utility Board, praised the ICC’s “appropriately skeptical” letter. He accused Ameren of crying wolf as “part of a political strategy to justify unjustifiably high rate increases.”

The state’s electricity business is in turmoil because of the expiration in January of a 10-year freeze on prices.

The freeze was part of a deregulation plan. Officials hoped more power companies would enter the market and drive down prices. That didn’t happen and when the freeze ended, rates soared – especially for Ameren’s customers in central and southern Illinois, who saw their bills double or triple.

In response to howls of protest, lawmakers are considering various plans to roll back rates, including one measure that would apply only to Ameren.

Ameren says that would mean financial devastation, and Moody’s Investors Service agrees. It lowered Ameren’s credit rating because of the possibility of legislative action.

Ameren had warned that a downgrade would mean:

n layoffs

n postponing tree-trimming and other “reliability” projects

n delaying electricity connections for new homes and businesses

n responding more slowly to customer calls

n dropping rebates and other proposals to ease the pain of rate increases

The Commerce Commission said Wednesday that it’s “very concerned” by how these steps would impair required service.

Associated Press Writer Michael Tarm contributed to this report.