The Illinois Commerce Commission approved an electric rate plan for Ameren Illinois Co. on Dec. 6 that the company said will result in a decrease of $1.70 per month on the typical residential customer's bill starting January 2018.
The order authorizes an allowed rate of return on the Ameren Corp. subsidiary's net original cost rate base of 7.04% for the 2016 reconciliation year and the 2017 filing year. This rate of return incorporates a return on equity of 8.4%. The rates of return result in operating revenues of $998.4 million and net annual operating income of $192.8 million. The $998.4 million revenue requirement represents a decrease of 1.71%, or $17.3 million, from the $1.02 billion granted under the prior rate case.
The annual formula rate plan decision tracks closely with what Ameren Illinois filed in April when it requested a 1.5% electric distribution revenue requirement reduction incorporating an 8.4% ROE.
Ameren Illinois said in a news release that the rate order marks the second consecutive and fifth overall rate decrease since the Energy Infrastructure Modernization Act, or Smart Grid Bill, was passed in 2011.
Ameren Illinois plans to spend approximately $480 million in capital improvements in its electric grid in 2017 for the benefit of customers. Grid modernization initiatives undertaken over the last six years have increased electric reliability by 17% and saved Ameren Illinois customers an estimated $45 million each year.
The utility has installed over 650,000 electric smart meters and plans to deploy two-way devices to all of its 1.2 million customers by the end of 2019.