Currently fixed costs represent 36 percent of a customer’s bill. Ameren Illinois sought to increase the fixed portion to 40 percent.
The administrative law judge assigned to the case recently issued a proposed order that said the fixed portion should be reduced to 30 percent, a recommendation that was celebrated by the Environmental Defense Fund and the Citizens’ Utility Board.
But, how much the change in the rate structure affects customer’s bills has yet to be determined without a final decision in place, said Marcelyn Love, spokeswoman for Ameren Illinois.
“I can’t address a specific cost right now,” Love said. “Everything is up in the air.”
Love said whatever the decision by the ICC, it would be revenue neutral for the utility.
“Our contention is more of the cost should be in a fixed cost,” Love said.
The Environmental Defense Fund applauded the recommendation from the administrative law judge, because it allows people to invest more into green energy.
The Citizens Utilities Board and Environmental Defense Fund opposed Ameren’s proposal, and recommended the fixed charge be reduced from 36 percent.
“Clean energy is a critical part of the race to clean up our nation’s power sector, and the Illinois Commerce Commission took a step in the right direction to help encourage a more efficient, healthier electricity system,” said Dick Munson, director of the Midwest Clean Energy. “Lowering Ameren’s fixed charges will give customers more incentive to invest in energy-saving resources like energy efficiency and generate their own power through solar panels. This decision, combined with the state’s landmark Future Energy Jobs Bill, continues to solidify Illinois’ place at the forefront of the clean energy economy.”
Ameren disagrees that having higher fixed costs takes away people’s ability to invest in green energy.
“We find their claim is incorrect and baseless,” Love said. “Again, you’re making assumption people would automatically be able to invest in these areas or by having fixed charge it’s preventing them from investing in those areas.”
Fixed cost fees include administrative costs such as sending out customer bills, processing payments and running call centers.
There is some thought that more of the costs should be on the variable cost side, so people who use more electricity would pay more for administrative costs, Love said.
“We know some customers would be adversely impacted, and usually are moderate to low-income customers,” Love said.
She said it could hurt those who heat their homes with electricity during the winter months.
She added there is no correlation between those who have greater income using more electricity.
Having more fixed costs would mitigate fluctuation caused by increased usage.
“If you have a fixed charge, it stays the same no matter the usage,” Love said.
State law mandates Ameren Illinois review its rate structure every three years.
Ameren’s request was filed in August 2016. A final order is expected in early March.
The new rate structure would go into effect in January 2018.