FAQs
General Questions					Electricity Delivery Service Rates			Natural Gas Service Delivery Rates
General Questions
1.		Q.	What type of rate adjustment did the Illinois Commerce Commission (ICC) approve for the Ameren Illinois Utilities on Wednesday, Sept. 24, 2008?
		A.	The ICC approved delivery service rate adjustments for the Ameren Illinois Utilities (AmerenCILCO, AmerenCIPS and AmerenIP) that will allow the companies to recover 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 customer 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 residential customer’s bill.
3.		Q.	Does this delivery service rate 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 rates?
		A.	The new delivery service rates take effect on Oct. 1, 2008. The new delivery service rates will apply to electricity and natural gas delivered on and after this date.
5.		Q.	The Ameren Illinois Utilities raised electricity rates on Jan. 2, 2007. Why did you ask for these rate adjustments?
		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 adjustments will provide.
Electricity Delivery Service Rates
6.		Q.	By how much will my electric bill be adjusted by the new electric delivery service rates?
		A.	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			+3.0%			$2.92
			AmerenCILCO			-0.7%			-$0.75
			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			+3.0%			$4.08
			AmerenCIPS – Metro East Area			+3.2%			$4.08
			AmerenCILCO			-0.8%			-$1.08
			AmerenIP			+8.5%			$11.17
			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.
7.		Q.	Why do you need to raise electric delivery service rates?
		A.	The Ameren Illinois Utilities requested electricity delivery service rate adjustments 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.    The bottom line is this – the delivery service rate adjustments are needed to generate revenue the Ameren Illinois Utilities will use to maintain and improve the electricity distribution system so as to provide safe, reliable energy delivery service.
8.		Q.	Why did AmerenIP receive the largest delivery service rate increase?
		A.	The rate adjustments for all three companies reflect the actual cost of doing business at each of those companies. The rates requested reflect the actual operating costs at AmerenIP, modifications to its depreciation schedule (to bring it in line with utility norms) and investments made to increase reliability and service to its customers.
9.		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 adjustment 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 equity.
10.		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
11.	Q.		By how much will my natural gas bill be adjusted by the new natural gas delivery service rates?
	A.		The impact of the new delivery service rates 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 amounts:
			Service Area				% Change			Dollars Per Month
			AmerenCIPS				+4.0%			$3.03
			AmerenCIPS – Metro East Area				-3.8%			-$3.12
			AmerenCILCO				-3.5%			-$2.64
			AmerenIP				+8.0%			$5.99
			The above amounts assume constant “Gas Charge (PGA)” costs and exclude local taxes. Actual monthly charges will vary depending on the actual amount of natural gas used.
12.	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.
13.	Q.		Why do you need to increase natural gas delivery service rates?
	A.		The Ameren Illinois Utilities requested natural delivery service rate adjustments because of the significant increases in the costs of delivering natural 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 11,600-mile natural gas distribution system.    The bottom line is this – the delivery service rate adjustments are needed to generate revenue the Ameren Illinois Utilities will use to maintain and improve the natural gas distribution system so as to provide safe, reliable delivery service.
14.	Q.		The ICC ordered that 80 percent of the Ameren Illinois Utilities’ fixed natural gas delivery service costs (that is, those delivery service costs that do not change even though the amount of natural gas usage does vary from one month to the next) be collected through the monthly customer change.  Can you explain the purpose of this finding?
	A.		You will notice a higher monthly customer charge and a reduced delivery service charge as a result of this ruling. This change will more evenly spread the charges for natural gas delivery for residential and small non-residential customers over the entire year, rather than being concentrated in the bills issued during the heating season months. The ICC recognizes that less than 1 percent of those costs associated with owning and operating our natural gas delivery systems changes from one month to the next even though customer usage does vary. Therefore, this change means our new rates will more accurately recover our actual delivery costs by spreading the majority of them uniformly over the entire year.    Please note that this change does not affect the method we use to determine the Gas Charge (also referred to as the PGA, which means “purchased gas adjustment”) portion of your bill the gas which reflects the actual cost of the amount of natural gas you use each month. Typically, this portion of your bill is higher during the heating season months and much lower during the summer months. The Ameren Illinois Utilities, which are energy delivery companies, purchase natural gas from producers located in various U.S. natural gas production areas for delivery to their customers. The price the Ameren Illinois Utilities pay for natural gas is known as the wholesale price and is not regulated. The wholesale price rises and falls based upon market conditions caused by supply and demand. The Ameren Illinois Utilities pass the cost of natural gas on to customers, dollar for dollar without any profit or markup in price, through the Gas Charge.
15.	Q.		When were natural gas delivery service rates last increased?
	A.		AmerenCILCO and AmerenCIPS were last given ICC approval to increase natural gas delivery service rates in 2003. AmerenIP received approval to increase natural gas delivery service rates in 2005.
16.	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.