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Rep. Bradley: Ameren's plan like 'payday loan business'

BY BECKY MALKOVICH, THE SOUTHERN

Friday, December 22, 2006 7:31 AM CST

The Illinois Commerce Commission's approval of Ameren's plan to offer a phase-in of an electric rate hike could mean consumers will pay more now and pay more later, according to state Rep. John Bradley.

Ameren customers will have the option of phasing in the higher rates over a three-year period. Under the plan, Ameren customers could phase in rate increases ranging from 42 percent to 55 percent by paying a 14 percent increase in each of the first three years of the plan, followed by a 3.25 percent interest payment.

"There are some fees and surcharges in there that will actually cost ratepayers even more than anticipated," The Marion Democrat said. "And the deferred interest? It's almost like Ameren is going into the payday loan business. People will pay for the phase-in and then pay interest for phasing it in."

State Rep. Mike Bost, D-Murphysboro, said the phase-in option means customers of Ameren will pay more in the long run than if they accepted the total increase from the start.

"But the commerce commission had to work with the guidelines they had," Bost said. "If the Democratic leadership - the governor, the speaker of the House and the president of the Senate - would have worked with the Republicans, which we wanted to do, maybe we could have put a temporary freeze into place that would have allowed us to sit down with the ICC to give our input. Then they would have worked within our guidelines, but they (the Democrats) didn't and now this is what we've got."

Bost said he is doubtful the Legislature can do anything to change the imminent rate hike, which goes into effect Jan. 2.

"We won't be back until the second week of January, after the rates and charges are in effect. When the ICC said to go ahead with the increase, essentially that was the state saying to go ahead. Can the state come back now and stop it? Wouldn't that give Ameren the opportunity to hold us liable? I don't know, but it will be interesting," Bost said.

Sen. Dave Luechtefeld said he wanted a compromise on the rate hike, "but it sure wasn't this one. This has been the biggest topic coming into my office for a long time now. People are scared to death of the increase."

The Okawville Republican said he was unsure whether the Legislature will take up the issue when it meets again in the new year.

"I know there will be lots of politicians talking, but in the end, I'm afraid this will stand," he said.

The increase will be the first since a decade-long rate freeze was instituted by the state Legislature. Ameren officials said the price hikes reflect the true cost of electricity.

Without the rate increases, Ameren said it would be forced to cut jobs and possibly seek bankruptcy. Reliability of service also would be in doubt, officials said.

- Kurt Erickson contributed to this story.

 

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