Under the Customer Elect Payment Plan, increases would be phased in at an annual maximum increase of 15 percent over three years or until the full amount of the rate increase is reached.
Compared to the companies' June 15 filing that would phase in increases for all residential customers through a legislatively approved mechanism called "securitization," today's Illinois Commerce Commission (ICC) filing would allow customers the choice to participate in the program.
Customers who enroll no later than April 23, 2007, will begin realizing the benefits of the phase-in beginning with their May 2007 bills. The latest a customer can enroll is Aug. 21, 2007. At the end of the phase-in period, customers would have three years to repay the deferred costs at a carrying charge interest rate of 6.5 percent. Customers who do not elect the residential phase-in plan would pay the full rate increase amount.
This plan and the earlier phase-in proposal would provide ways to soften the impact of 40 to 55 percent increases that are expected for Ameren Illinois utilities' residential customers in 2007. Since Ameren's Illinois utilities own almost no generation, the companies must purchase power from the competitive market to provide customers' energy needs. These costs will be passed onto customers\-dollar-for-dollar with no mark-up.
As part of today's filings, the Ameren Illinois utilities have proposed an additional contribution of $5 million to their Dollar More and Warm Neighbors programs, which provide bill paying assistance, energy conservation materials and rebates for energy efficient equipment. The companies would also continue their aggressive public education effort on energy conservation and would give away a substantial number of energy saving light bulbs.
"Our goal with today's filing is to provide greater bill paying flexibility to our customers, while encouraging energy efficiency and offering help to those most in need," said Scott A. Cisel, president of Ameren's Illinois utilities. "We realize that after 15 to 25 years with no electric rate increases, any increase will be hard on our customers, especially those with low or fixed incomes. The option to have the increases phased in could help those who are struggling to pay their bills now."
Higher electric rates are primarily the result of higher electric supply costs. With the expiration of power supply contracts at the end of 2006 and the end of a 10-year rate freeze, Ameren's Illinois utilities must purchase power from the competitive wholesale market to meet customers' future energy needs. Those wholesale costs are higher than those contracted for in the past.
Ameren Corporation (NYSE: AEE) through its subsidiaries, serves 1.2 million electric and nearly 800,000 natural gas customers in Illinois.
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