8-KOther EventsExhibits & Filings

AMEREN CORP 8-K Report, Corporate Update (Nov 2, 2007)

Filed November 2, 2007For Securities:AEE

Summary

On November 2, 2007, Ameren Corporation's Illinois subsidiaries, including Central Illinois Public Service Company (AmerenCIPS), Central Illinois Light Company (AmerenCILCO), and Illinois Power Company (AmerenIP), filed requests with the Illinois Commerce Commission (ICC) seeking significant increases in their electric and natural gas delivery service rates. The electric rate increase requests total $180 million annually across the three utilities, aimed at supporting an 11% return on equity and reflecting a combined rate base of $2.1 billion. Notably, AmerenIP's requested electric rate increase includes a provision to cap residential customer increases at less than 10% in the first year, potentially deferring a portion of the revenue to the second year, aligning with previous pledges. In addition to electric service, the subsidiaries are also seeking approval for natural gas rate adjustments, requesting an aggregate annual increase of $67 million ($15 million for AmerenCIPS and $56 million for AmerenIP), while AmerenCILCO requested a decrease of $4 million. These natural gas rate filings also assume an 11% return on equity and a combined rate base of $0.9 billion. Beyond the direct rate increases, the filings propose mechanisms for more timely recovery of investments and reconciliation of bad debt expenses for both electric and gas services, as well as a revenue decoupling mechanism for natural gas to separate fixed cost recovery from sales volumes.

Key Highlights

  • 1Ameren's Illinois utilities (AmerenCIPS, AmerenCILCO, AmerenIP) filed for electric delivery service rate increases totaling $180 million annually.
  • 2AmerenIP's electric rate filing includes a cap for residential customers to keep annual increases below 10%, potentially phasing in revenue over two years.
  • 3Natural gas delivery service rate adjustments were also filed, with a net requested increase of $67 million annually across AmerenCIPS and AmerenIP, and a decrease for AmerenCILCO.
  • 4The rate increase requests are based on an 11% return on equity and include specific rate base figures for electric ($2.1 billion) and natural gas ($0.9 billion) services.
  • 5Filings propose mechanisms for better matching of current revenues with current costs, including reconciliation of bad debt expenses and timely recovery of distribution plant investments.
  • 6A revenue decoupling mechanism for natural gas services is sought to separate fixed cost recovery from sales volume.
  • 7ICC proceedings are expected to take up to 11 months, with decisions anticipated by October 2008.

Frequently Asked Questions

This 8-K filing announces that Ameren's Illinois subsidiaries (AmerenCIPS, AmerenCILCO, and AmerenIP) have submitted requests to the Illinois Commerce Commission (ICC) to increase their electric and natural gas delivery service rates. It also details proposed mechanisms to improve revenue matching with costs and investment recovery.

The Ameren Illinois utilities are requesting an increase of $180 million in annual revenues from electric delivery services and a net increase of $67 million in annual revenues from natural gas delivery services (with AmerenCIPS and AmerenIP requesting increases and AmerenCILCO requesting a decrease).

The ICC proceedings are expected to take up to 11 months, with decisions required by October 2008. The actual effective date of any approved rate changes will depend on the ICC's decision.

Yes, for AmerenIP, the filing proposes to cap residential electric customer bill increases at less than 10% in the first year, with any excess amount potentially deferred to the second year. The other utilities' residential rate increase requests were within their previously pledged limits.