FAQs
Ameren Illinois Utilities Request New Electric and Natural Gas Delivery Rates
General Questions					Electricity Delivery Service Rates			Natural Gas Service Delivery Rates
General Questions
1.		Q.	What type of rate increase request did the Ameren Illinois Utilities file with the Illinois Commerce Commission (ICC) on Friday, Nov. 2, 2007?
		A.	The Ameren Illinois Utilities (AmerenCILCO, AmerenCIPS and AmerenIP) have asked the ICC to approve new electric and natural gas delivery service rates that will allow the companies to recover present and ongoing operating costs, while continuing to make the distribution systems more reliable.
2.		Q.	What is a delivery service rate?
		A.	The delivery service rate is the charge the Ameren Illinois Utilities put on bills to cover the cost of delivering electricity and natural gas to our customers. Electricity and natural gas delivery service charges account for about one-third of a customer’s bill.
3.		Q.	Does this include the actual cost of the electricity and natural gas?
		A.	No. The actual cost of the electricity is shown on the bill as the “Electric Supply” charge. Typically, this is the largest portion of an electricity bill. The utilities pass this cost on to customers without any markup or profit to the utilities.    The actual cost of natural gas is shown on the bill as the “Gas Charge (PGA).” The PGA (purchased gas adjustment) reflects the actual cost of the natural gas without any markup or profit to the utilities.
4.		Q.	When will I be charged the new delivery service rate?
		A.	The Ameren Illinois Utilities have asked the ICC for permission to change the delivery service rates. The ICC will conduct a thorough review of our request and provide opportunities for public comment and testimony. This process will take 11 months to complete. If approved by the ICC, new delivery service rates will not take effect before October 2008.
5.		Q.	The Ameren Illinois Utilities raised electricity rates on Jan. 2, 2007. Why are you asking for another rate increase at this time?
		A.	The higher rates that went into effect on Jan. 2, 2007, were almost entirely due to the higher cost of electricity. Though rates increased, the Ameren Illinois Utilities did not profit from the higher cost of electricity. That cost was passed on to customers without any markup or profit to the utilities.    AmerenCILCO and AmerenIP were last granted a very modest electric delivery service rate increase in December 2006. AmerenCIPS customers received a small reduction in their delivery rates. AmerenCIPS and AmerenCILCO were last granted a natural gas delivery service rate increase in 2003, while AmerenIP was granted a rate increase in 2005.    Since the last electric and natural gas delivery service increases, operating costs have increased significantly and infrastructure investments have continued to be made to safely and reliably deliver electricity and natural gas to Ameren Illinois Utilities’ customers. In order to recover the actual costs of delivering electricity and natural gas, while continuing to have the ability to make investments to improve our delivery systems, the Ameren Illinois Utilities need the additional revenue these rate increases would provide.
6.		Q.	What will the Ameren Illinois Utilities do if the ICC does not approve your entire requested rate increase?
		A.	Our case is sound and accurately reflects the true costs of providing service. We cannot predict the actions that may be taken by the ICC.
Electricity Delivery Service Rates
7.		Q.	How much will my electric bill increase if the ICC approves the new electric delivery service rates?
		A.	In 2007, the Ameren Illinois Utilities pledged to keep the overall residential bill increases to less than 10 percent for each company – AmerenCILCO, AmerenCIPS and AmerenIP. We are keeping that pledge.    The bill for a typical residential electricity customer who does not use electricity for heating and uses 10,000 kilowatt-hours (kWhs) of electricity per year is expected to change by the following amounts:
			Service Area			% Change			Dollars Per Month
			AmerenCIPS – All Customers			+4.4%			$4.17
			AmerenCILCO			+2.8%			$2.83
			AmerenIP			+8.0%			$7.75
			The bill for a typical all-electric residential customer who uses 18,000 kWhs per year is expected to change by the following amounts:
			Service Area			% Change			Dollars Per Month
			AmerenCIPS			+3.9%			$5.25
			AmerenCIPS – Metro East Area			+4.1%			$5.25
			AmerenCILCO			+2.1%			$3.00
			AmerenIP			+8.7%			$11.33
			The above estimates assume constant “Electric Supply” costs and exclude local taxes. Actual monthly charges will vary depending on the actual amount of electricity used.
8.		Q.	Why do you need to raise electric delivery service rates?
		A.	The Ameren Illinois Utilities have requested delivery service rate increases because of the significant increases in the costs of delivering electricity to our customers. In addition, the Ameren Illinois Utilities plan to spend hundreds of millions of dollars between 2008 and 2010 to improve the reliability of our 45,000-mile electricity distribution system. For example, we intend to invest $560 million in distribution lines, $55 million for line transformers and $110 million to upgrade electricity substations. To better serve customers, we are installing automated electric meters and investigating smart grid technology.    The Ameren Illinois Utilities have experienced significant operating cost increases. For example, since 2004, the cost of aluminum wire has risen 40 percent, wooden utility poles are up by 45 percent, pole transformers are up 75 percent and copper wire has increased 100 percent.    The bottom line is this – the current delivery service rates do not generate sufficient revenue that will allow the Ameren Illinois Utilities to adequately maintain and improve the electricity distribution system while earning a reasonable return on investment.
9.		Q.	Why is AmerenIP’s delivery service rate increase greater than the other two companies?
		A.	The rate increases for all three companies reflect the actual cost of doing business at each of those companies. Actual operating costs at AmerenIP make it necessary for us to request a higher rate increase.
10.		Q.	You began issuing electric rate relief rebates in September 2007. Now you are asking for a delivery service rate increase. Isn’t this simply a way to get that money back?
		A.	Absolutely not. First of all, the Ameren Illinois Utilities agreed never to recover any portion of the rate relief rebates. Secondly, most of those rebates were funded by electricity generating companies. Third, the rate relief program applies to the actual cost of electricity, which appears on bills as the “Electric Supply” charge. This charge reflects the actual cost of electricity without any markup or profit to the utilities.    The delivery service rate increase request applies only to the cost of delivering energy to your home or business. The revenue generated by this rate is used to meet our operating expenses and to provide the Ameren Illinois Utilities with a reasonable return on investment.
11.		Q.	When were delivery service rates last increased?
		A.	AmerenCILCO and AmerenIP were last given ICC approval to increase delivery service rates in 2007. AmerenCIPS had a small reduction in the delivery service rate.
12.		Q.	If approved by the ICC, when will the new rates take effect?
		A.	If approved by the ICC, the electric delivery service rates will not become effective before October 2008.
13.		Q.	Will electric rates continue to rise in the future?
		A.	We cannot predict future cost increases. However, we are committed to keeping future increases as small as possible so as to minimize the impact on our customers.
Natural Gas Service Delivery Rates
14.	Q.		How much will my natural gas bill increase if the ICC approves the new natural gas delivery service rates?
	A.		The impact of the proposed delivery service rates will vary by each of the three Ameren Illinois utility companies. The bill for a typical residential natural gas customer who uses 785 therms of natural gas per year is expected to change by the following amount:
			Service Area				% Change			Dollars Per Month
			AmerenCIPS				+7.1%			$5.42
			AmerenCIPS – Metro East Area				-0.9%			-$0.75
			AmerenCILCO				-1.8%			-$1.33
			AmerenIP				+11.6%			$8.67
			The above estimates assume constant “Gas Charge (PGA)” costs and exclude local taxes. Actual monthly charges will vary depending on the actual amount of natural gas used.
15.	Q.		Why are rates going down for AmerenCIPS–Metro East and AmerenCILCO, but increasing for the other two companies?
	A.		The rates reflect the actual cost of doing business at each of those companies. The decrease in the AmerenCIPS–Metro East rate will bring that rate paid by those customers to the same level as is paid all other AmerenCIPS customers. Customers served by AmerenCIPS–Metro East were previously served by AmerenUE, which had a different rate structure. The AmerenCILCO rate decrease reflects a change in the way assets are depreciated. AmerenCILCO’s depreciation rate will now be consistent with all other Ameren Illinois Utilities.
16.	Q.		Why do you need to increase natural gas delivery service rates?
	A.		Since the last natural gas delivery service increases, operating costs have increased significantly and infrastructure investments have continued to be made to safely and reliably deliver natural gas to Ameren Illinois Utilities’ customers. The Ameren Illinois Utilities anticipate making investments totaling $215 million between 2008 and 2010 to enhance the natural gas distribution system, including improvements to the gas storage fields and installation of 260,000 automated natural gas meters to enhance service.    The bottom line is this – the current delivery service rates do not generate sufficient revenue that will allow the Ameren Illinois Utilities to adequately maintain and improve the 11,600-mile natural gas distribution system while earning a reasonable return on investment.
17.	Q.		When were delivery service rates last increased?
	A.		AmerenCILCO and AmerenCIPS were last given ICC approval to increase delivery service rates in 2003. AmerenIP received approval to increase delivery service rates in 2005.
18.	Q.		When will the new rates take effect?
	A.		If approved by the ICC, the natural gas delivery service rates will not become effective before October 2008.
19.	Q.		Will natural gas rates continue to rise in the future?
	A.		We cannot predict future cost increases. However, we are committed to keeping future increases as small as possible so as to minimize the impact on our customers.