Illinois business and labor organizations joined with Ameren Illinois Tuesday to outline a legislative proposal that could, over 10 years, accelerate rebuilding aging natural gas delivery infrastructure while maintaining regulatory oversight.
Ameren Illinois, which is regulated by the Illinois Commerce Commission (ICC), maintains close to 1,250 miles of natural gas transmission lines and nearly 17,000 miles of delivery lines that feed service to more than 806,000 Illinois customers within a 43,700 square-mile territory in Central and Southern Illinois.
Under the Natural Gas Modernization, Public Safety & Jobs Act (SB 1665/HB 2414), Ameren Illinois would invest $330 million and create 250 jobs to boost efforts to update its gas transmission, distribution and storage facilities. The 10-year blueprint is designed to reduce nonhazardous leaks and trim maintenance costs while delivering long-term savings for customers. The ICC would monitor the process and level penalties if the utility fails to comply.
“This is an opportunity for Illinois to develop an important long-term energy infrastructure strategy and plan that creates savings and benefits for our customers while helping grow our economy,” said Ameren Illinois CEO Richard Mark. “The natural gas plan will help lay the foundation for economic development for years to come. As other states aggressively modernize and upgrade their natural gas infrastructures, Illinois cannot afford to fall behind.”
A typical Ameren Illinois residential natural gas customer (using 785 therms annually) would experience an average increase of $3.70/year, or about 0.5% of the total gas bill, for each year of the 10-year program, the utility said.
“A strong, modern energy infrastructure is critical to retaining and attracting employers who put Illinoisans to work,” said Illinois Business Roundtable President Jeff Mays. “Illinois can regain its economic strength by creating vibrant employer growth, investing in technology and embracing new ways of doing things.”
Because predictable cost recovery would be needed to enable the utilities to raise capital and borrow money at reasonable rates to make long-term investments and modernization plans, the proposal would allow participating natural gas utilities to recover their delivery service costs through a performance-based formula rate approved by the ICC, based on annual reviews and a regular, transparent process.
The updated regulatory framework would enable the gas utilities to more quickly recover their initial upfront costs and accelerate modernization efforts designed to meet stricter federal pipeline safety standards imposed by Congress in 2011, Ameren Illinois said.
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