As a result of a recent capacity auction, electricity bills are expected to increase by more than $11 a month for electricity supply for a residential customer who uses 10,000 kwh of energy a year, according to Ameren Illinois.
The increase goes into effect in June.
The Midcontinent Independent System Operator electricity capacity auction earlier this month produced results of $150 per megawatt-day, which is almost nine times higher than the $16.75 per megawatt-day Ameren Illinois has in place now.
“The market sets supply costs, not Ameren Illinois, and these costs are passed directly to utility customers without markup,” said Ameren spokeswoman Marcelyn Love.
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Love added in an email that supply costs decreased by 8 percent in 2014.
The annual capacity auctions help give incentives to electricity producers to have enough energy on days when there would be highest demand for electricity, such as the hottest days during the summer when everyone is running their air conditioning.
For customers in Ameren’s Rate Zone III, the summer supply and transmission rate will be 5.848 cents per kwh.
The non-summer rates, which are in effect from November through May, will be 6.093 cents per kwh for Rate Zone III, which includes Belleville, Collinsville, Edwardsville, Fairview Heights and Granite City, among other towns.
Ameren estimated the monthly increase to $11.23 a month for the residential customer who uses 10,000 kwh a year.
Customers who receive their electricity supply from a third party, either through a municipal aggregation program or an independent contract, will not be affected by Ameren’s new supply rates.
In addition to the electricity supply charges that begin in June, Ameren Illinois also is asking to increase charges to deliver energy to customers.
Residential customers who use 10,000 kwh of energy a year can expect their energy bills to go up by $2 to $7 a month just for the delivery of electricity, according to Ameren Illinois.
Ameren Illinois has filed its required annual rate requests for electricity delivery costs, which would go into effect beginning in January of next year if approved.
The Illinois Commerce Commission is now set to conduct an eight-month review of Ameren’s delivery rate request to validate the utility’s investment plan. A final decision on delivery charges is expected in December.
If approved, Ameren Illinois expects the higher delivery charges to bring in about $110 million to the utility.
Ameren expects to invest $122.2 million in Energy Infrastructure Modernization Act improvements this year. The 2011 law authorized both ComEd and Ameren to make improvements to its electricity delivery system and have consumers pay for the upgrades.
Ameren Illinois is allowed to recover its costs for maintaining and modernizing the system to ensure it is reliable, Love said. Delivery charges cover the costs of maintaining wires, poles and technology that distribute electricity to homes and businesses.
“We’ve made a number of different improvements in the metro-east and throughout the service territory,” Love said.
The improvements have saved customers about $48 million each year, Love said, and have led to 238,000 fewer electricity interruptions.
Ameren also is ahead of schedule in installing new advanced meters for customers, Love said.
The supply cost however makes up a bulk of a person’s electricity bill, Ameren said.
“We don’t control supply costs, the market does,” said Craig Nelson, the senior vice president of Ameren Illinois. “What we do is control the delivery, and we’re doing everything possible to ensure that system upgrades are providing direct customer benefits.”