Ameren on Hot seatPoliticians, Residents Confront CEO
By Nick Lucchesi, The Telegraph, Alton, Ill.
Feb. 21–EAST ST. LOUIS — State politicians and boisterous residents asked pointed questions of Ameren executive Scott Cisel during a public hearing Tuesday about electric rates that surged after the end of a 10-year rate freeze in January. More than 200 people in attendance at the East St. Louis Center of Southern Illinois University Edwardsville echoed many who say they are faced with paying their electric bills instead of buying other essentials, such as food and prescription medicine.
Cisel is president and CEO of Ameren Illinois utilities CIPS, IP and CILCO, which collectively serve 1.2 million customers in the state, beginning just south of Interstate 80.
“We acknowledge and understand the difficulties our customers are facing with the higher electric charges after a period of which the rates were reduced and then frozen,” Cisel read from a statement to the audience. “The higher electric rates are having an even greater impact on customers’ bills due to increased usage associated primarily with the recent change in weather.”
Several stage legislators from central and Southern Illinois spoke on behalf of constituents who have seen electric bills rise more than 300 percent in some cases.
State Sen. James F. Clayborne Jr., D-Belleville, was host of the meeting, and other legislators, including state Sen. William Haine, D-Alton, were there to ask Illinois Commerce Commission officials and Cisel why rates were so high and who was getting the money.
The electric rates rose Jan. 1, but bills were much higher than the 30 percent to 50 percent increase predicted for the average residential customer.
Haine asked Joy Nicdao-Cuyugan, the ICC’s director of financial analysis, how profit margins of Ameren electricity providers compared to other providers in the United States during the 10-year rate freeze.
He also asked for an outline of the corporate structure of Ameren as a whole.
“It has been said over the past few weeks by Ameren (officials) that they do not make any money off the generation of power; (Ameren) is just passing (rates) through,” Haine said. “We would like to know the origin of the purchases and where the profits go from that purchase.”
Politicians at the meeting said they have received hundreds of calls from customers who knew about the increase but felt misled.
One legislator asked Cisel about the number of “average” Ameren customers, and Cisel said that about 75 percent of the customer base was classified as “average.” Those customers saw rate increases of about 30 percent to 50 percent, Cisel said.
Many in attendance were members of AARP, which organized the event in conjunction with the Illinois Senate. AARP representatives said they could expect a moderate rate increase but not the price jump they have seen.
August Westbrook of Alton, a retired Union Electric lineman and foreman, said he thought Cisel and others at the forum were “glossing over” the sale of electricity-producing power plants in the 1980s and 1990s.
The sales of those plants left Illinois with only companies that primarily distribute the electricity through power lines. Those companies had to buy electricity on the open market from power plants.
The two main companies that distribute power in Illinois are Ameren and Commonwealth Edison, which operates in the northern portion of the state.
The utilities raised their rates after the ICC approved the new reverse auction process in September, with the new rates going into effect Jan. 1. But opponents of the new process say deregulation of Illinois’ power market has failed to produce competition among providers of electrical power to residential and business customers, leaving Ameren and ComEd with virtual monopolies.
“I’m not opposed to a reasonable rate increase, and I think they are entitled to that,” Westbrook said outside the hall. “But not the capacity I’ve seen.”
“Somewhere along the line, if there’s not something done, I would have to let something else go and pay (money) on utilities,” said Charles Rogers, 79, of Alton, a retired steelworker who came by bus with others from the River Bend
Haine said the rate increase is the No. 1 issue right now for the General Assembly.
“That’s why we’re here,” Haine said after leaving the hall. “We expect to take action.
“We’re focused. We are just reeling under this, along with our constituents. They didn’t expect this increase.”
The Citizens’ Utility Board, a utility consumer advocacy group, is calling for electric customers to attend similar meetings in Chicago, Peoria and Waukegan in the coming weeks.
nick_lucchesi@thetelegraph.com
—–
Copyright (c) 2007, The Telegraph, Alton, Ill.
Distributed by McClatchy-Tribune Business News.
For reprints, email tmsreprints@permissionsgroup.com, call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA.
NYSE:AEE, NYSE:EXC,