Increase in rates needed to continue system improvements

Scott A. Cisel,
President & CEO,
Ameren Illinois
Peoria, Springfield and Decatur, IL, U.S.A. — (METERING.COM) — November 5, 2007 – The Ameren Illinois utilities (AmerenCILCO, AmerenCIPS and AmerenIP) have asked the Illinois Commerce Commission (ICC) to approve new electric and natural gas delivery service rates that will allow the companies to recover present and ongoing costs and continue making infrastructure investments.

"This additional revenue is essential for the Ameren Illinois utilities to maintain and improve our electric and natural gas infrastructure and fulfill our commitment to deliver energy in a safe, reliable and cost-efficient manner to our customers," said Scott A. Cisel, president and chief executive officer of the Ameren Illinois utilities. "Our current level of electric and gas delivery service rates are insufficient to recover our existing costs of providing service to our customers and earn a reasonable return on our investment."

The Ameren Illinois utilities plan to spend $900 million to further improve system reliability and make other capital investments through 2010. Customers have asked for enhanced reliability, as their demand for electricity continues to increase.

"These rate increases are necessary to attract the money needed from investors to make these critical investments in our infrastructure," Cisel said.

As filed with the ICC, the request would provide a total of $247 million annually in additional revenue to be used throughout the utilities’ 43,700 square-mile service territory. The proposed gas and electric rate changes are not expected to take effect before October 2008.

"Earlier this year, we pledged to keep the overall residential electric bill increases to less than 10 percent for each utility in the next rate filing," Cisel said. "Today’s filing with the ICC fulfills that promise."

Since 1997, electricity usage by Ameren Illinois utilities’ customers has risen by about 11 percent, an increase driven by the greater use of air conditioning, large screen televisions, computers and other electronic devices. The outlook is for continued growth in the use of electricity.

To meet this growing demand, the Ameren Illinois utilities anticipate making significant investments in their electric distribution systems between 2008 and 2010. For example, some of these planned expenditures include $450 million for distribution lines, $55 million for line transformers and $110 million to improve substations. To better serve customers, the utilities plan to spend $30 million to purchase automated electric meters and are investigating smart meters and smart grid technologies.

The utilities also plan to install 260,000 automated natural gas meters to enhance service.