The economy forces tough decisions.
Lori A. Burkhart is Fortnightly’s managing editor.
In the midst of a recession, the past year has seen conservation and savings become the new chic in the United States. This presents a dilemma for utility companies and regulators, who realize the need for better infrastructure for reliability purposes as well as for increasing efficiency and a cleaner environment. But someone has to pay, whether it is shareholders or ratepayers, and state regulators find themselves at ground zero in deciding in a new reality what constitutes fair rate treatment.
Illinois, for example, is experiencing an unemployment rate of about 10 percent, its highest level since 1983. Barely a year after a rate-hike implementation, Ameren, citing reliability needs, again is asking the Illinois Commerce Commission for another increase. This comes after cutting staff, reducing office space and slashing its dividend. Meanwhile, AARP is fighting the proposal, and released survey findings that nearly half of the people over 50 said the recession has made it harder to pay their utility bills. This isn’t an enviable position for either the utility or the regulators, but it’s a situation found all over the United States.