Quinn: Extend rate freeze for utility companies

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By Sean J. Miller | Friday, September 29, 2006 1:11 AM CDT | () comments

Calling the utility rate increases scheduled to start next year “anti-consumer,” Illinois Lt. Gov. Pat Quinn reiterated his call for a rate freeze extension during a stop in Moline on Thursday.

Quinn supports a proposed House bill that would extend the current freeze on Illinois utility rates for another three years, he said at a press conference beside the Mississippi River.

The rates freeze is set to expire Jan. 1, and Ameren and Commonwealth Edison, or ComEd, have already announced significant rate increases.

“We’re totally opposed to this rate increase,” Quinn said. Continuing the rate freeze “is crucial to utility consumers in the state of Illinois,” because many people are already coping with high gasoline prices.

Small businesses also will be affected, Quinn said. “If they see the same kind of giant rate increase on January 1st it’s going to hurt our economy.”

The rate hike needs to be debated during the current campaign season, he said. “We want people to ask their representatives or their candidates where they stand on this.”

The freeze-extension bill could be voted on shortly after the November election, Quinn said.

Ameren residential customers can expect to pay about $26 more a month, a 40 percent increase, the company said.

ComEd residential customers can expect to pay about $13.20 more a month, a 22 percent increase, according to a company statement.

The rate increases were announced after the Illinois Commerce Commission held an electricity supply auction earlier this month. Power companies such as Ameren and ComEd — who distribute electricity — bid on the electricity offered from power generators. The companies announced their rates increases after the auction.

The Attorney General challenged the results of the auction in court documents filed Sept. 18. “The high electricity prices produced by the auction are unacceptable — these rates are 25 percent higher than the rates that small customers are currently paying in surrounding states,” Attorney General Lisa Madigan said in a statement.

Leigh Morris, a spokesman for Ameren, said the rates increases were necessary because the cost of generating electricity is increasing.

“The rates these companies are currently charging are well below the national average,” Morris said.

He said a continuation of the rate freeze would be devastating for Ameren. “We could be facing bankruptcy.”

Quinn said Illinois froze utility rates shortly after it deregulated the utility market in the 1990s in order to facilitate competition. “That competition hasn’t materialized in the last decade,” he said.

Utility companies have continued make a profit despite the rate freeze, Quinn added. “There’s no reason they should get obscene profits.”

Ameren, the parent company of AmerenIP, AmerenCIPS and AmerenCILCO, recorded a net income of $386 million in 1998, Morris said. In 2005, the company recorded a net income of $606 million.

The city desk can be contacted at (563) 383-2245 or newsroom@qctimes.com.