Ameren customers of South and Central Illinois will feel the impact of a rate increase on their utility delivery charges averaging up to $13 a month starting today.

The rates are subject to seasonal pricing as well as the spectrum of usage for each Ameren residence in the state.

The increase on utilities, approved by the Illinois Commerce Commission on Sept. 24, will be applied to the delivery charge, or the cost utility companies charge to bring into a home.

This constitutes approximately a 30 percent increase on the utilities.

Coles County, which has the third lowest median income in the state, is part of the South and Central parts of Illinois that Ameren has said upon the approval of the increase will possibly feel the effects.

The rate hikes for the state

Ameren’s rate hikes are part of the company’s goal to provide reliable utility service to the state of Illinois, said Leigh Morris, spokesperson for Ameren.

Coles County is primarily served by AmerenCIPS. Customers in the Charleston area can expect rate increases on common use electricity of $2 to $5 a month and $2 to $7 for households that use electric heating. Natural gas delivery rates will also be increased with rates jumping $1 to $3 in the winter months to $2 to $6 for summer months.

AmerenIP customers, who are dispersed throughout the Coles County area, can expect rate increases $6 to $18 a month for general use of electricity, $7 to $15 for those that use electric heating, $4 to $9 a month for natural gas delivery in the winter months and $2 to $6 for the rest of the year.

AmerenCILCO customers will, however, be receiving a discount on their electricity of up to 60 cents a month.

Their gas delivery for winter months can decrease up to $3, but will increase the rest of the year anywhere from $2 to $6. This Ameren sub-company serves the Peoria area primarily.

These rates are based on a sliding price system that can go up and down based on whether the household is a single-family home or multi-family home. They can also increase and decrease on a usage basis.

“If you use more electricity than our average user, your rates can be higher than predicted,” Morris said. “I think it’s common sense.”

The rates are based on the average consumption of 10,000 kilowatts of electricity annually and 785 therms of natural gas heating. Ameren’s research also assumes electric supply and natural gas costs remain flat.

To see individual rates based on household usage, customers can input their information on ameren.com’s rate calculator. The calculator should estimate an individual’s personal rate increase for both gas and electric, Morris said.

Out goes the freeze, in comes the flood

Until 2007, Ameren could not increase rates on utilities because of a freeze instituted by the ICC. The freeze was lifted in January of 2007, which Ameren took advantage of requesting a $247 million increase on Nov. 2, 2007. However, the ICC approved the rate increase $85 million short at $162 million, a cut that Morris said was to ease panic in a weary national economy.

“In the spirit of compromise, we decided to limit our request to $207 million from the $247 million, which was well within our rights,” Morris said. “Was $247 million justifiable? Yes, absolutely it was.”

Morris said Ameren would only be receiving an estimated 8 percent revenue return once the rate increase is instated. This would be below the legal limits of 10 percent set forth by the ICC. This would be the total revenue for all three Ameren companies that service Illinois.

Now that the freeze has been suspended, Ameren executives have stated they are planning to request frequent small rate increases rather than wait another 15 years for one extreme rate increase, Morris said.

“Overall, I think people are accepting to smaller, frequent rate increases that allow the communities to adjust,” he said. “People can’t accommodate huge increases even in a healthy economic climate.”

But, Ameren faces some opposition from Illinois watchdog groups.

CUB takes the opposition position

“This rate increase could be devastating to the Southern and Central Illinois region,” said Jim Chilsen, spokesman for the Citizens Utility Board. “Ameren overstated their company’s expenses to justify an absurd amount of money.”

Chilsen and director of CUB David Kolata have been in the process of appealing the ICC’s decision to award Ameren with $162 million. The watchdog group concentrates on the financial accuracies of companies’ charges.

Based on Union Electric’s, Ameren’s parent company, record high revenue profits for 2007, Chilsen and Kolata believe Ameren has greatly overstepped their boundaries in fair and accurate requests. CUB has estimated through their financial research that Ameren should only be entitled to a $58 million increase, at most.

“They say they need this money to maintain quality service,” Chilsen said. “Well, our research shows they don’t need nearly that much.”

He also said that CUB’s research into the request shows that Union Electric separated profits from their utility companies in order to request more money.

“In the way that the executives run these companies, too often do customers take a back seat to the company’s bottom line,” Chilsen said.

CUB also takes a position against Ameren’s decision to make frequent rate requests. Chilsen said increased frequency in rate hikes would devastate the economy, leaving little money for communities to spend on other purchases that will help the economy flourish.

“Every extra dollar spent on utilities is one more dollar that isn’t going to sales tax or to feed people’s families,” he said.

Krystal Moya can be reached at 581-7945 or at ksmoya@eiu.edu.