Jun. 9--Ameren IP customers could each be paying on average $152 in higher gas and electric bills next year, while Ameren CIPS ratepayers could end up paying $119 in higher energy bills if state regulators approve the $226 million rate increase Ameren Illinois applied for last week.

Ameren's three Illinois subsidiaries -- IP, CIPS and CILCO -- filed petitions Friday with the Illinois Commerce Commission seeking the rate increases in electricity and natural gas delivery, which, if approved, would take effect in May 2010.

The proposed rate hikes, if approved, would not take effect for at least 11 months -- a timetable that calls for ICC staff to study the proposal, to report on whether they are justified and to hold a hearing featuring testimony of rate hike foes and supporters.

In late 2007, Ameren Illinois had asked the ICC to approve a $247 million rate hike for its three subsidiaries. In late September, however, the commission approved a $162 million increase.

The Citizens Utility Board has declared it will fight the proposed Ameren rate hikes. Ratepayers already are struggling to pay bills during an economic downturn, CUB spokesman Jim Chilsen said.

"A rate hike request never comes at a good time, but Ameren gets the prize for horrible timing," Chilsen said. "This is a symbol that we still have a long way to go to create a fair power price system in Illinois. It's just proof that we have more work to do."

Victoria Busch, an Ameren Illinois spokeswoman, said the proposed rate increases are justified because of rising costs and the utility's commitment to safe and reliable service.

"If we didn't feel it was justified, we wouldn't even go through this process," Busch said.

"We're not out to, by any means, gouge our customers," she said. "We're asking for a fair rate of return."

Chilsen pointed out that on June 1, Ameren cut the price that customers pay for electricity by 8 percent -- the outcome of savings realized through the wholesale purchase of electricity by the newly formed Illinois Power Agency. State lawmakers created the entity in 2007 in response to sharp rate hikes the state allowed Ameren and Consolidated Edison to pass on to ratepayers after a decade of frozen rates.

But the $226 million combined rate hike being sought by Ameren "threatens to hijack those consumer benefits on June 1," Chilsen said.

Busch said that the utility's three Illinois subsidiaries must go through a lengthy process to raise their rates in response to higher costs -- unlike retail store owners who can raise the price of a loaf of bread immediately when costs go up.

"We don't have the luxury of changing our prices to adjust according to our expenditures," Busch said. "What our customers have told us is that they would prefer more frequent rate increases, but smaller. So, therefore, we are trying to live up to that."

But Chilsen said Ameren's rate increases are animated by the quest for more profits.

"Very often Ameren is searching for an exorbitant profit versus a healthy profit," he said.

Contact reporter Mike Fitzgerald at mfitzgerald@bnd.com or 239-2533.

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