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10-year plan upgrades natural gas infrastructure, creates jobs for Central and Southern Illinois

March 26, 2013

Legislation includes strong regulatory safeguards, holds utilities accountable for achieving results

COLLINSVILLE, Ill., March 26, 2013 /PRNewswire/ — To leverage abundant natural gas supplies and low wholesale costs, Illinois employer and labor organizations and Ameren Illinois outlined details of a legislative proposal to accelerate the modernization of Illinois’ aging natural gas delivery infrastructure while maintaining Illinois Commerce Commission (ICC) regulatory oversight.

Under the Natural Gas Modernization, Public Safety & Jobs Act (SB 1665/HB 2414), Ameren Illinois will invest $330 million and create 250 much-needed jobs to accelerate its ongoing efforts to strengthen and update its massive natural gas transmission, distribution and storage facilities in central and southern Illinois. The 10-year blueprint will reduce non-hazardous leaks and trim maintenance costs while delivering long-term savings for customers. The ICC will closely monitor the process and level penalties if Ameren Illinois fails to comply.

“This is an opportunity for Illinois to develop an important long-term energy infrastructure strategy and plan that creates savings and benefits for our customers while helping grow our economy,” said Richard Mark, president and CEO of Ameren Illinois. “The natural gas plan will help lay the foundation for economic development for years to come. As other states aggressively modernize and upgrade their natural gas infrastructures, Illinois cannot afford to fall behind.”

Ameren Illinois maintains approximately 1,250 miles of natural gas transmission lines and nearly 17,000 miles of delivery lines that feed service to more than 806,000 Illinois customers within a 43,700 square-mile territory in Central and Southern Illinois.

“A strong, modern energy infrastructure is critical to retaining and attracting employers who put Illinoisans to work,” said Jeff Mays, president of the Illinois Business Roundtable. “Illinois can regain its economic strength by creating vibrant employer growth, investing in technology and embracing new ways of doing things. It’s time to move Illinois forward.”

Predictable cost recovery is needed to enable the utilities to raise capital and borrow money at reasonable rates to make long-term investments and modernization plans. Under the proposal, participating natural gas utilities would recover their delivery service costs through a performance-based formula rate approved by the ICC, based on annual reviews and a regular, transparent process. The updated regulatory framework will enable the gas utilities to more quickly recover their initial upfront costs and accelerate modernization efforts designed to meet stricter federal pipeline safety standards imposed by Congress in 2011.

“Hundreds of dedicated men and women work hard every day to maintain a safe, reliable natural gas delivery system that millions of central and southern Illinoisans rely on every day to at work, school and home,” said Don Degonia, Business Manager of Plumbers and Fitters Local 360. “The Natural Gas Modernization, Public Safety & Jobs Act will enable us to more efficiently make needed upgrades and enhancements to the system to the benefit of our customers and local economies.”

Gas delivery system upgrades under the proposed modernization plan would provide consumers with long-term savings and accelerate many of the upgrades Ameren Illinois has already begun. A typical Ameren Illinois residential natural gas customer (using 785 therms annually) would experience an average increase of $3.70 per year (about 0.5% of the total gas bill) for each year of the 10-year program.

SB 1665/HB2414 customer benefits and protections include:

    Upgrades system integrity, safety &
     reliability

    * Ensures and enhances the
     integrity, safety, and reliability
     of our natural gas delivery system

    * Replaces 65 miles of gas
     transmission pipeline

    * Reduces the number of non-
     hazardous underground gas leaks

    * Reduces the time period for
     completion of certain gas leakage
     surveys

    * Expands public safety and
     emergency-responder education and
     training

    * Significantly reduces third-
     party excavation damage

    Enables more predictable, long-
     term planning & savings

    * Lowers long-term costs of debt,
     reducing interest expenses for
     customers

    * Creates cost efficiencies in
     system operations and maintenance

    * Significantly reduces the cost of
     manual meter reads

    * Facilitates long-term investment
     to improve reliability and to
     modernize the system

    * Establishes more predictable,
     less volatile rates for customers

    Enhances customer service & options

    * Enhances customer service and
     reduces estimated gas bills

    * Creates new opportunities for
     customer choice

    * Improves information for the
     development of new energy
     efficiency programs

    * Provides $5 million for programs
     to help customers manage their
     energy usage and lower their costs

    Maintains strong utility oversight
     & review

    * Retains strong Illinois Commerce
     Commission (ICC) oversight and
     review

    * Makes utility reporting open and
     transparent to hold the utilities
     accountable

    * Creates utility performance
     improvement metrics and
     establishes annual goals

    * Creates financial penalties to
     ensure the utilities meet annual
     performance goals

    * Penalizes utilities, removing
     them from formula rates if
     customer rate impact limits are
     exceeded

    * Ensures the utilities invest in
     and modernize their infrastructure

    * Continues to require utilities
     prove that their actual costs of
     delivery services are prudently
     incurred and reasonable in amounts
     consistent with ICC practice and
     law

    Reduces greenhouse gas emissions &
     supports energy efficiency

    * Reduces leak call vehicle and
     construction equipment emissions

    * Eliminates tens of thousands of
     meter reader vehicle miles
     annually

    * Cuts thousands of manual field
     data recording vehicle trips
     annually

    * Reduces Class 3 leak emissions
     (carbon dioxide) by 20%

    * Improves information for the
     development of new energy
     efficiency programs

“The Natural Gas Modernization, Public Safety & Jobs Act requires crucial investment in the state’s infrastructure and workforce, giving Illinois a much-needed economic shot in the arm by creating and supporting 1,250 jobs statewide,” said Glyn Ramage, Business Manager LIUNA 12 Counties. “We urge the legislature to pass this bill and put people to work modernizing these critical systems.”

Organizations supporting SB 1665/HB2414 include: Illinois AFL-CIO, Illinois Business Roundtable, Illinois Hispanic Chamber of Commerce, Laborers International Union of North America Midwest Region (LIUNA), LIUNA Local 100, LIUNA Local 459, LIUNA Twelve Counties Southwestern Illinois District Council, Plumbers & Fitters Local 101, Plumbers & Fitters Local 360, IBEW Local 51, IBEW Local 309, IBEW Local 649, IBEW Local 702, Chicago Federation of Labor, Construction & Laborers’ District Council of Chicago and Vicinity, Utility Workers Union of America, Gas Workers Union Local 18007, Pipefitters Local 597, Operating Engineers Local 150 and Teamsters Local 786. More information is available at www.EnergyFutureIL.com.

Ameren Illinois delivers energy to 1.2 million electric and 806,000 natural gas customers in downstate Illinois, and our mission is to meet their energy needs in a safe, reliable, efficient and environmentally responsible manner. Our service area covers more than 1,200 communities and 43,700 square miles.

For more information, visit AmerenIllinois.com or find us on Twitter @AmerenIllinois.com. For more information on the Natural Gas Modernization, Public Safety and Jobs Act, visit EnergyFutureIL.com.

SOURCE Ameren Illinois


Source: PR Newswire