Lower Energy Bills on the Way for Ameren Customers
Bloomington-Normal residents could see lower electricity and gas bills as a result of the recent federal tax legislation.
The Tax Cut and Jobs Act of 2017 was passed last year in an effort to make the US more competitive and productive through lower business tax rates, a modernized international tax system and incentives to invest in the US.
The new legislation will decrease Ameren Illinois’ effective tax rate by nearly 13%. The new tax rate will translate to $50 million in annual savings for the company.
Ameren Illinois is a regulated utility by the Illinois Commerce Commission (ICC). As a regulated natural monopoly, the company must ensure that its rates are fair, equitable and proportionate to prudent capital investments. Thus, the allocation of the increased savings from the tax cut must be justified to the ICC.
On January 22, Ameren filed a plan with the ICC to pass the saving back to the customers, said Ameren Illinois Communications Executive for Community and Public Relations Marcelyn Love. The plan was approved by the ICC on February 6.
Customers will begin to see changes in their energy bills as soon as this March. Bloomington-Normal residents will see a $2.50 to $3.00 per month decrease on the delivery portion of their electric bills, Love said. Ameren concurrently asked for changes to the natural gas rates as a result of the federal tax cut; customers could see gas bill savings of roughly $1 per month.
Ameren Illinois customers have already benefited from savings in 2018, Love said. In December, the ICC ruled in favor of lower delivery service rates for Ameren customers. Residential customers are saving approximately $1.70 per month on their electric bill in 2018 as a result of the previous ICC ruling.
“I love seeing a lower energy bill,” said Sean Craig, Bloomington resident and Ameren Illinois customer. “I’m not too certain of the particulars of the tax cut, but I’d say that’s a pretty nice thing of Ameren to do. Something tells me it’s not what it seems, though.”
If Ameren Illinois had not expedited these filings, customers could have waited until 2020 to see the savings on their energy bills. This filing works in conjunction with the 2011 Energy Infrastructure Modernization Act passed by the Illinois General Assembly. This legislation was a landmark decision setting in motion a $2.6 billion investment by ComEd to strengthen and modernize the grid.
The act will improve system reliability, create jobs, establish new business models, develop accountability-based regulatory models, diversify the energy portfolio and provide innovative methods for consumers to save money on their energy bills. As part of this act, Ameren Illinois has promised to provide $10 million in programs designed to help low-income families and seniors over the ten-year program, according to SB1652.
As the lower federal tax rates stay in effect, consumers will continue to see increased energy savings, Love said.