Tuesday, Mar 10, 2015
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Illinois Senate votes for Energy Infrastructure Modernization Act

2 years, 3 months ago by Bob Gough

The Illinois Senate voted overwhelmingly to pass a resolution calling for the modernization of the Ameren Illinois electricity distribution grid

The Illinois Senate voted overwhelmingly Thursday to pass a resolution calling for the modernization of the Ameren Illinois electricity distribution grid that will improve reliability and create hundreds of jobs throughout the state.

The resolution, which passed 47-4, states the Illinois Commerce Commission (ICC) must follow the rules set by the Energy Infrastructure Modernization Act (EIMA) that the Illinois General Assembly approved in 2011. The legislation provides incentives for investor-owned electric utilities to make significant upgrades and investments to its electric grid while meeting performance metrics, which will result in increased reliability, faster restoration times after outages and significant savings for consumers.

“The rationale behind the Energy Infrastructure Modernization Act was simple,” said Ameren Illinois President and CEO Richard Mark, during a Senate hearing to support the resolution. “Utilities like Ameren Illinois would have the financial certainty to move forward with much-needed enhancements to the state’s electric grid under a performance-based formula rate mechanism.”

After the Legislature passed the EIMA last year, Ameren Illinois launched its 10-year, $625 Modernization Action Plan (MAP) that included: replacing and refurbishing underground distribution cables and fortifying utility poles; planning for the installation of new technology to detect outages and restore services; construction of a new training center to prepare the next generation of high-tech utility workers; the selection of a test bed location to enable entrepreneurs to tie into the grid to test new technologies and business models; and – most important – the process of hiring the 450 new Illinois employees.

But during the utility’s formula rate case earlier this year, the ICC reduced Ameren’s revenue by $48 million annually, making it impossible for it to cover the investments it committed to make and that lawmakers approved under the EIMA. Until the regulatory certainty intended by the EIMA is restored, Ameren Illinois has no choice but to reduce those investments.

“Ameren Illinois employees work every day to maintain the integrity of over 43,000 miles of transmission and distribution lines that deliver power safely to 1.2 million customers,” Mark testified. “We opted into the Modernization Act to prepare this massive electric infrastructure for the 21st century. If the Illinois Commerce Commission is compelled to apply the statutory directives as intended by the Illinois General Assembly, Illinois consumers and the Illinois economy will realize substantial benefits.”

The resolution passed by the Illinois Senate calls on the ICC to order the utilities to file changes to their performance-based formula rate tariffs that: 1) apply an interest rate set at the utility’s weighted average cost of capital; 2) set rate base and capital structure using final year-end values reflected in the FERC (Federal Energy Regulatory Commission) Form 1 rather than average numbers; and 3) correct errors the regulatory authority made. It instructs the ICC to approve those changes by Dec. 31.

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