Ameren is seeking approval of a $226 million rate increase from the Illinois Commerce Commission (ICC).
The utility company socked consumers in 2007 in the wake of the power auctions that ended the 10-year rate freeze, which accompanied the passage of deregulation legislation in 1997. At the time, the state’s electric utilities were hawking deregulation; the promise made to consumers was they would be able to choose their providers.
Naively, one of the concerns expressed during the dog-and-pony shows CIPS and Illinois Power officials delivered at the time was that people would have their dinner interrupted by telemarketers trying to get customers to switch services. That practice erupted in a big way after the phone companies deregulated, leading to passage of legislation establishing no-call lists.
But it was not only the no-call lists that helped deprive consumers of real choice, the electric utilities were slow to deliver on deregulation’s critical promise.
Deregulation did bring change. Companies such as Ameren quickly absorbed utilities such as Illinois Power and CIPS, and those companies also sold off many of their own power-generating facilities.
Dynegy now owns the old Illinois Power’s power-generating plant at Baldwin. The new coal-fired plant under construction in Washington County is being developed not by a utility, but by Peabody Coal, although approximately a dozen utility concerns are participating as limited partners.
The deregulation legislation did freeze rates for 10 years and establish an auction at the end of that period for utilities to purchase their power. Competition was supposed to foster lower rates, but that did not happen. Divested of their own power plants, the utilities bid in a market that is much less open than anticipated.
Angry consumers demanded rate relief, which was widely supported. A major obstacle was former Senate President Emil Jones, a recipient of sizable donations from the Commonwealth Edison utility.
The deregulation choice option was never discarded, but availability came in dribs and drabbles. Many large industries were in the first tier of eligibility and took advantage of deregulation to shop for lower rates.
By 2007, smaller customers such as municipalities and small businesses could also shop for other providers. And a number of southern Illinois cities were working toward cooperative buying when ill-timed elections swept several of the more knowledgeable proponents out of office.
The General Assembly finally hammered out some rate relief and the furor died down. It is starting to resurface with Ameren’s newest rate increase request.Unlike 2007, some choice is emerging for consumers.
Last week Sparta, one of the cities involved in the municipal cooperate effort in 2007, switched from Ameren to Direct Energy for its electric service. Savings are projected at more than $65,000 per year.
And the deregulation process has finally worked its way down to residential customers. A listing of available third-party retail electric suppliers is available at http://www.icc.illinois.gov/pluginillinois. Ameren also has an information page at illinoispowerswitch.com.
It only took 12 years, but the promise of deregulation has finally arrived. Something to think about as the ICC considers Ameren’s latest rate-increase request.
Springston is a graduate student in the MAT program.
