ICC issues a decision on Ameren Gas' request for a general rate increase

On Nov. 16, the Ill. Commerce Commission (ICC) disallowed $36.34 million to Ameren Illinois' rate request for its natural gas delivery services in Ill. The decision is approximately 50.8 percent lower than Ameren's initial request for a $71.57 million increase and approves a 9.44 percent return on equity (ROE), a reduction from Ameren's proposed 10.3 percent ROE.

The ICC has issued its decision after closely scrutinizing Ameren's rate case filings and additional materials submitted by the utility, Commission Staff, and various interveners over an 11-month legal proceeding. The process aims to ensure the utility receives the necessary funds to provide safe and reliable service to customers and to maintain and replace aging infrasturcture at a reasonable cost to ratepayers. Inaccordance with the Ill. Public Utilities Act, these costs are only recoverable if a utility demonstrates they are reasonable and prudent.

The decision initiates a two-step future of gas proceeding that includes a detailed action plan for the utility's future infrastructure investments to evaluate the impacts of Illinois' decarbonization and electrification goals on the natural gas system.

"As the State embarks on a journey toward a 100 percent clean energy economy, the gas system's operations will not continue to exist in its current form. Identifying how our gas and electric systems can adapt to meet these goals, and what specific actions should be taken to achieve them, will be an important task for the Commission moving forward," said ICC Chairman Doug Scott.

The decision also establishes a new low-income discount rate for eligible customers whose incomes are up to 300 percent of the Federal Poverty Level (FPL). The rate will offer a five-75 percent monthly total bill credit for qualifying customers beginning Oct. 1, 2024. In Dec. of last year, the ICC found the implementation of low-income discount rates to be appropriate for Illinois' electric and natural gas residential customers. As a part of the Commission's decision, Ameren will be required to submit annual reports documenting cost-reduction from the program.

Customers already enrolled in the state's Low-Income Home Energy Assistance Program (LIHEAP) will automatically qualify for the newly-established low-inome discount rate. Customers not currently eligible for LIHEAP, but whose income falls within 200-300 percent of FPL will still qualify for a discount by self-reporting their income eligibility to their utility. Customers struggling to pay their utility bills are encourage to apply for LIHEAP.

The impact of the rate case decision on individual customers will vary based on customers' service class and energy usage. The ICC plans to an issue estimated bill impact for the average residential customer once Ameren submits its compliance filing with the Commission.

Ameren delivers natural gas to 800,000 residential, public sector, and business customers in more than 1,200 communities throughout central and southern Ill.