Consumer group calls rate hike unlawful

SPRINGFIELD (AP)—Illinois Power Co.‘s request for a rate increase would cost $3 billion over the next decade and violate a law that says customers can’t be charged for plants that aren’t needed, a consumer group said Tuesday.

The Citizens Utility Board says the utility isn’t entitled to raise rates to pay for its $4 billion Clinton nuclear plant.

“When the plant becomes necessary and economical, it is appropriate to charge consumers for that power plant,” said Susan Stewart, CUB’s executive director. “But until that time we should not be charged for that power plant.”

A spokesman for the utility disputed Stewart’s remarks, which were made as the Illinois Commerce Commission prepared for a public hearing Tuesday night in Jacksonville.

The ICC has set nine such hearings over the next 4’4 months, and is expected to rule on the Illinois Power case in October.

At a news conference in Springfield, Stewart said the utility cannot increase rates to pay for the Clinton plant if it produces more power than consumers need. She said Illinois Power has 51 percent more power than it can market.

“They essentially have a white elephant on their hands right now,” she said. “There is not a market for that power out there.”

Barbara Lillyman, a utility spokesman, said the company needs a reserve of 17 percent excess generating capacity to maintain reliable service, and could not reach that level without Clinton.

Illinois Power, which serves much of the lower two-thirds of the state, wants to raise rates gradually over the next seven to 10 years, then cut rates in the following year. The utility says the end result will be a $278 million increase in its annual revenues.

CUB said the plan would give Illinois Power $3 billion in new revenue over 10 years. The average residential customer would pay an additional $2,421 over the period, while a small business would pay an extra $5,000, Stewart said.

Lillyman declined to discuss CUB’s cost estimates, saying the issue would be discussed at ICC hearings later this year.

Stewart said Illinois Power customers already are paying for $1.5 billion in Clinton costs under rate increases that were approved before passage of current state laws governing public utilities.

She said CUB also would argue that the proposed rate increase can’t be approved until an audit determines whether the high cost of the Clinton plant was a result of mismanagement.

Beth Bosch, an ICC spokesman, said the commission expects the audit to be ready before it rules on the rate plan.