The Illinois Commerce Commission has gone farther than administrative judges asked them to go earlier this year — cutting Ameren Illinois’ $128.8 million rate increase request for natural gas delivery services by $55.8 million.
Commissioners unanimously approved a $73 million increase Wednesday.
It’s not yet known how much bills will go up with the decision. The previous proposal would have amounted to a 13% increase for customers, or $10 per month.
“The ICC’s responsibility is to balance the interests of Illinois’ utilities and their consumers,” said Doug Scott, the regulatory body’s chairman, in a statement. “We recognize that any decision impacting Illinoisans’ bills is not a small one, and after careful review of Ameren’s proposed investments, the Commission opted to strike excess charges and approve necessary and justified projects.”
Originally, Ameren Illinois requested a $134 million rate hike earlier this year. The utility company had since whittled that down to $128.8 million. Last month, two administrative judges recommended the regulators cut the request by $43.7 million.
Ameren Illinois, which is based in Collinsville, serves more than 800,000 natural gas customers in downstate Illinois, according to the company.
Consumer advocates, who’ve long been critical of the utility company’s request, said they’re pleased to see the regulators rein in Ameren’s request.
“We’re moving in the right direction, but there’s still a lot of work to do because far too many people are having a hard time affording their gas bills,” said Jim Chilsen, spokesman for the Citizens Utility Board.
The increase amounts to the fourth hike approved by the commission in seven years, the consumer advocates said.
Ameren has argued the request would not increase the price that customers pay for the natural gas, but it would help the company pay for the delivery of gas to customers — and it was needed to make the system safer and more reliable.
“We are conducting an in-depth review of the ICC's order to determine how it will impact our customers and our ability to meet federal pipeline safety requirements and other critical investments to our natural gas delivery infrastructure system,” Brad Kloeppel, senior director, gas operations and technical services, said in a statement.
For example, Ameren’s is working to renovate wells in its natural gas storage fields in Freeburg and Centralia to make them more efficient and economic long-term, which was included in the request ahead of the commission on Wednesday.
The company is currently swapping its vertical wells for horizontal ones as a way to store gas in sandstone deep below the surface. The horizontal wells, which start vertical and fan out parallel to the ground well below the surface, require less acreage and less equipment on the surface to operate, Kloeppel said.
Ameren buys most of that natural gas stored in those fields during the summer when prices are lower, and the fields allow the company to store roughly 60% of what’s needed during winter and insulate customers from price spikes, Kloeppel said.
Wednesday’s decision by the commerce commission is not the first in recent history that group has flexed its regulatory muscles. Two years ago, state regulators dramatically curtailed utility providers rate hike requests — including Ameren’s by 50.8%.
