Last week the Ameren Illinois Utilities took action to ensure the utilities will continue to have the resources needed to provide a reliable, safe energy delivery system by requesting the Illinois Commerce Commission to approve delivery service rate increases that are not expected to take effect before May 2010.

"Customers rely on us to provide safe, efficient and reliable energy delivery service, as well as respond quickly and effectively to outages caused by storms and to repair damage caused to natural gas lines," said Scott A. Cisel, president and chief executive officer of the Ameren Illinois Utilities (AIU).

"We understand today's economic challenges are affecting the people, businesses and industries we serve as well as our own organization. We recognize that any rate increase will be cause for concern. However, be assured that our proposed rate increases are necessary to provide the essential financial resources to meet our obligations to our customers.

"We have strived to minimize the financial impact of the delivery service rate increases on our customers by significantly reducing our own operating costs without sacrificing our commitment to reliability and safety.

"Because we are committed to openness and transparency, we are trying a new way of communicating rate information to our customers. The effect of the proposed delivery service rates on residential customers will be printed on bills for a one-month period in August. Furthermore, by visiting our Web site or calling customer service, our customers will be able to see how the new rates affect their bills for a full year," Cisel said.

Reliable Energy Delivery Service

The Ameren Illinois Utilities are continually working to maintain and strengthen their 46,000-mile electric distribution system and 18,000-mile natural gas distribution system to meet customer needs today and tomorrow.

To help meet the growing demand for energy while improving the reliability of the AIU distribution system, 77 percent - more than $173 million - of the $226 million rate increase request represents costs associated with the construction, operation and maintenance of the energy distribution system and the people who directly serve the customers.

Under the proposed rate plan, AmerenCIPS residential customers who use 10,000 kWh of electricity a year will pay $59 more per year, however, those AmerenCIPS customers in the Metro East area will pay $65 more per year; AmerenCILCO customers will pay $64 more per year and AmerenIP customers will pay $97 more per year.

Delivery Costs

The proposed rate increases affect the charges for delivering electricity and natural gas to customers. Delivery service rates vary between the three Ameren Illinois companies (AmerenCIPS, AmerenCILCO, AmerenIP) to reflect the actual cost of doing business at each of those companies. The actual cost of energy (electricity or natural gas) appears as a separate charge on bills. The Ameren Illinois Utilities do not earn a profit from the sale of the electricity or natural gas commodities.

Recovering Higher/Unexpected Costs

Unlike most businesses, AIU is not allowed to immediately adjust customer rates to offset higher or unexpected operating expenses. AIU must borrow money to meet essential expenses. In order to recover higher costs, AIU must file rate increase cases, which normally take 11 months to complete.

Lower Electric/Gas Supply Costs

Though not part of the delivery service rate increase request, Ameren Illinois Utilities customers today are paying less for the commodity electricity as a result of a sharp decline in the wholesale price of electricity announced on May 8, 2009. The new rates for electricity supply - shown as the "Electric Supply" charge on bills - mean a residential customer who uses 10,000 kWhs of electricity a year will save approximately $100 on the total annual electric bill for electricity used after June 1.

The actual cost of energy (electricity and natural gas commodities) appears as a separate charge on customer bills. The Ameren Illinois Utilities do not profit from the sale of electricity and natural gas commodities.

Going Green

Under Illinois law, up to 4 percent of the electricity we deliver this year will come from renewable sources, primarily wind generated power. In surveys many customers have said they would like the option of being able to purchase renewable energy credits (RECs) at a modest price. Each REC represents the green attributes of 1,000 kWhs of electricity produced from renewable energy resources.

In today's rate filings, AIU is asking the ICC to approve the Voluntary Green Program (VGP). Residential customers will have the option of contributing as little as $3 more per month to participate. AIU will use the proceeds from the program to purchase RECs on behalf of program participants. The program is strictly voluntary.

Use Less, Spend Less

Individuals and businesses alike are learning and applying the principles of energy efficiency and conservation. As your utility, we are helping you spend less on energy by using less without sacrificing personal comfort.

Launched in 2008, our Act On Energy (ActOnEnergy.com) initiative has become a primary source of energy savings information, as well as significant financial incentives for residential and business customers. By the end of our first program year, our compact fluorescent light (CFL) program could reduce residential customer electric bills by as much as $6.5 million per year, while our business programs have cut their annual electric bills by at least $4 million.

Ameren Illinois Utilities customers also have the option of enrolling in the Power Smart Pricing Program. Administered by CNT Energy, Power Smart Pricing allows customers to pay the hourly wholesale price of electricity rather than a fixed rate, giving them another tool to better manage their energy bills.