The Citizens Utility Board (CUB) has compiled some interesting data on Ameren. Starting in 1997, the year electricity rates were frozen by the state, they graph Ameren’s profits every other proceeding year, right up to 2005. One would expect profits to be modest at best, given the handicap of a rate freeze. But check this out:
Doesn’t look like the price freeze negatively affected their ability to nearly double their profits over the past ten years. So, it appears Ameren doesn’t really need that 55% increase, does it? It would be fair for someone to retort, “Why shouldn’t they be allowed to raise their rates 55%? Let the free market decide!”
Ah, but therein lies the problem. Ameren is still a monopoly in residential services. If you don’t like the Ameren rate hike and decide to go with their competition… you can’t, because there is no competition. Thus, consumers do deserve protection from price gouging — and a good case can be made that this is, in fact, price gouging.
There are those who are trying to help. CUB has “filed a brief with the appellate court, arguing the [rate hike] plan is illegal and hits consumers with unfair market prices at a time when the power companies still hold a monopoly on residential services,” according to today’s Journal Star. And Illinois Attorney General Lisa Madigan is trying to get the results of the recent reverse auction thrown out on the same basis.
CUB also reports, “Under the Electric Consumer Protection Act, HB 5766, rates would be frozen for another three years or until at least 33 percent of residential customers have switched electric suppliers.” So, it looks like there’s a possibility that 55% rate hike may not take effect in January after all.