Ameren’s “poorly defined” project budgets overestimate costs, far exceed recent spending and serve as reserves in some cases, the state’s top legal official said.
ILLINOIS, United States — Illinois residents are bracing for a $129 million increase in their gas bills from Ameren, but the state’s attorney general has reportedly estimated the hike would overcharge customers by tens of millions.
Attorney General Kwame Raoul’s office told Illinois utility regulators that Ameren’s proposal would overcharge residents $43.7 million. His office said Ameren’s “poorly defined” project budgets overestimate costs, far exceed recent spending and serve as a yardstick in some cases.
“Ameren defines ‘comprehensive project’ as a category used to capture numerous similar activities consisting of high-volume, low-cost routine work performed on a repetitive or continuous basis on the company’s gas system,” Raoul’s office said in a document submitted to the Illinois Commerce Commission. “The (Attorney General) asserts that in practice, however, Ameren’s overhead budgets do not include any of the attributes described by the company. The AG explains that despite multiple requests, Ameren has not provided unit counts, cost drivers, or working documents that would allow its forecasts to be traced to historical experience or adjusted to known conditions.”
Raoul’s office asked the commission to reduce Ameren’s proposed $43.7 million rate increase, eliminating more than a third of the company’s proposed rate increase.
This gas price increase is the fourth for Ameren in just over seven years. Consumer advocates said the multiple rapid increases have made gas prices unaffordable for thousands of Illinois residents, particularly in the eastern St. Louis metro area.
“By representing only about half of Ameren’s proposed unwarranted costs, we hope this opinion will be a catalyst for the ICC to take even tougher rein on the excesses still inherent in this rate hike,” Sarah Moskowitz, executive director of the Citizens Utility Board, said in an emailed statement. “With winter approaching and the fallout from rising energy prices already affecting households across Illinois, consumers are counting on state regulators to act as the strongest possible shield against Ameren’s profits.”
Brad Kleoppel, Ameren Illinois’ senior director of gas operations and technical services, defended the proposed $129 million gas rate hike, saying the funds would help maintain the safety, integrity and reliability of the company’s natural gas distribution system and support its transition to clean energy.
“The investments we have proposed in our reliability plan will allow us to meet stringent federal pipeline safety requirements, reduce leaks and provide reliable, affordable natural gas to our residential and commercial customers,” Kleoppel said. “We are evaluating all available methods to maintain compliance at the lowest possible cost, based on operational feasibility and industry best practices.”
The advocacy groups plan to host a “Future Energy Forum” Nov. 1 from 1 to 3 p.m. at the Southern Missionary Baptist Church in East St. Louis, just weeks before the deadline set by Illinois utility regulators to make a final decision on the case. Advocates said information about reducing utility bills, including how to apply for energy assistance, will be available at the forum and refreshments will be served.
