A Bad Day to Be an Ameren Customer
Well, it’s been coming for months, but KWMU reports that Ameren has officially begun hearings in front of the Public Service Commission to raise rates by 12 percent. Ameren probably won’t hear a decision about this until sometime early next year. Hopefully, by then this whole economic catastrophe will blow over and a utility price hike won’t feel as bad.
Ameren claims the increased funds will go toward employee wages, construction materials, power plant fuels, and capital expenditures. Many people are raising an eyebrow or two because of this proposal’s timing. I’m sure it’s just a coincidence that Ameren wants to raise rates at the same time it wants to build a new nuclear plant. But, of course, raising customers’ rates in order to fund plant construction is illegal, but I’m sure that Ameren officials know that. Also, it has that new renewable energy mandate to manufacture and pay for. But, hey, that’s supposed to save us all money in the long run. … I just wish those savings would get here sooner.
The real question here is why Ameren (or any other utility company) should have to get approval for its rates. This is an example of the problems that can arise when the government decides to interfere with the free market. Frequently, governments offer favored utility companies quasi-monopoly status in exchange for strict regulations. This means that utility consumers have very little choice about from whom to purchase their service, but the government controls the rates that the utilities can charge. In the ideal world, Ameren would be able to charge whatever it wants — but its rates would be kept in check by virtue of its having to compete against a number of other utility providers, not by the whims of government officials.
Comment by Dave Roland — November 24, 2008 @ 10:47 a.m.