Consumer Advocacy Groups Protest Ameren's Major Rate Hike Request Amid Record Profits

On May 16, 2025, significant concerns arose regarding Ameren Illinois' proposal for a $134 million gas rate hike, which advocacy groups label excessive and unjustifiable. The Citizens Utility Board (CUB), along with Illinois PIRG (Public Interest Research Group) and the Environmental Defense Fund (EDF), are urging the Illinois Commerce Commission (ICC) to reconsider this request, bringing attention to the alarming increase in profits that Ameren has enjoyed while simultaneously seeking to increase rates for consumers.

CUB Executive Director Sarah Moskowitz emphasized the outrageous nature of Ameren’s request, describing it as an attempt to secure the highest shareholder profits among gas utilities in Illinois without reasonable justification. According to CUB, the demand for a rate hike is nearly three times what the utility can credibly support under existing laws, citing serious overcharges embedded in the proposal.

The proposal is particularly controversial as it represents Ameren's fourth attempt to raise rates since 2018. Over these years, the company has successfully increased delivery rates by about 50%, equating to $202 million. During the same period, Ameren’s parent company reported a staggering 45% rise in profits, totaling $6.9 billion. This disconnect between improved financial performance and requests for additional consumer funds has triggered widespread discontent among advocate groups.

In analyzing the situation, CUB and its allies have sought expert testimony to argue against the proposed increase, recommending a reduction by at least $55.8 million based on several key areas in the proposal. One prominent issue relates to the return on equity (ROE), which Ameren wishes to raise from 9.44% to 10.7%. CUB argues that this increase is unreasonable and insists that a more modest ROE of 9.45% would be fairer, leading to reduced pressures on consumer bills.

The issue of 'capital structure' also raises concerns, as Ameren aims to increase its common equity ratio to 52%. CUB argues for maintaining the status quo at 50%, asserting that this adjustment alone could minimize the burden on customers by an additional $5.9 million. Furthermore, the consequences of Ameren’s legal expenses for outside consultations during rate cases have raised eyebrows, particularly when customers are burdened with covering these costs.

In light of the considerable financial burden being placed on customers, CUB highlights the need for legislative changes to prevent utilities from passing on such expenses to consumers, advocating for transparency and accountability through the proposed Utility Transparency Act.

Additionally, the impact of Ameren's financial forecasts and assumptions concerning gas sales and working capital has been criticized as overly optimistic, potentially misrepresenting the actual expenses incurred by consumers. These adjustments, cumulatively amount to a further considerable reduction in the requested rate hike.

Both EDF and Illinois PIRG have joined forces to challenge Ameren's claims about necessary transmission system expenditures, suggesting that the utility's current strategy of replacing transmission pipes is more focused on boosting profits than on practical compliance needs.

As the ICC prepares to rule on Ameren’s rate hike request later this year, scheduled for around November, stakeholders remain vigilant and vocal in their objections. The proposed increase is estimated to add between $8 and $10 to average monthly residential gas bills. This would further exacerbate the challenges facing many consumers, especially as market conditions suggest rising costs in gas supply.

For over four decades, CUB has stood as a watchdog for utility customers in Illinois, championing consumers' rights and striving to block unnecessary rate hikes while facilitating refunds where applicable. Their ongoing commitment highlights the importance of consumer advocacy in the face of corporate interests that sometimes overshadow public welfare. With a membership base exceeding three million, Illinois PIRG continues to fight for public interest, ensuring consumer needs are taken into account in vital regulatory discussions.

With increasing scrutiny and calls to action, the next few months will be crucial in determining the course of Ameren Illinois' rate increase proposal and the broader implications it holds for consumers across the state.