10-year plan upgrades natural gas infrastructure, creates jobs for Central and Southern Illinois

Legislation includes strong regulatory safeguards, holds utilities accountable for achieving results

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Mar 26, 2013, 03:32 ET

COLLINSVILLE, Ill., March 26, 2013 /PRNewswire/ -- To leverage abundant natural gas supplies and low wholesale costs, Illinois employer and labor organizations and Ameren Illinois outlined details of a legislative proposal to accelerate the modernization of Illinois' aging natural gas delivery infrastructure while maintaining Illinois Commerce Commission (ICC) regulatory oversight.

Under the Natural Gas Modernization, Public Safety & Jobs Act (SB 1665/HB 2414), Ameren Illinois will invest $330 million and create 250 much-needed jobs to accelerate its ongoing efforts to strengthen and update its massive natural gas transmission, distribution and storage facilities in central and southern Illinois. The 10-year blueprint will reduce non-hazardous leaks and trim maintenance costs while delivering long-term savings for customers. The ICC will closely monitor the process and level penalties if Ameren Illinois 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 Richard Mark, president and CEO of Ameren Illinois. "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."

Ameren Illinois maintains approximately 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.

"A strong, modern energy infrastructure is critical to retaining and attracting employers who put Illinoisans to work," said Jeff Mays, president of the Illinois Business Roundtable. "Illinois can regain its economic strength by creating vibrant employer growth, investing in technology and embracing new ways of doing things. It's time to move Illinois forward."

Predictable cost recovery is needed to enable the utilities to raise capital and borrow money at reasonable rates to make long-term investments and modernization plans. Under the proposal, participating natural gas utilities would 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 will 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.

"Hundreds of dedicated men and women work hard every day to maintain a safe, reliable natural gas delivery system that millions of central and southern Illinoisans rely on every day to at work, school and home," said Don Degonia, Business Manager of Plumbers and Fitters Local 360. "The Natural Gas Modernization, Public Safety & Jobs Act will enable us to more efficiently make needed upgrades and enhancements to the system to the benefit of our customers and local economies."

Gas delivery system upgrades under the proposed modernization plan would provide consumers with long-term savings and accelerate many of the upgrades Ameren Illinois has already begun. A typical Ameren Illinois residential natural gas customer (using 785 therms annually) would experience an average increase of $3.70 per year (about 0.5% of the total gas bill) for each year of the 10-year program.

SB 1665/HB2414 customer benefits and protections include:

Upgrades system integrity, safety & reliability

* Ensures and enhances the integrity, safety, and reliability of our natural gas delivery system

* Replaces 65 miles of gas transmission pipeline

* Reduces the number of non-hazardous underground gas leaks

* Reduces the time period for completion of certain gas leakage surveys

* Expands public safety and emergency-responder education and training

* Significantly reduces third-party excavation damage

Enables more predictable, long-term planning & savings

* Lowers long-term costs of debt, reducing interest expenses for customers

* Creates cost efficiencies in system operations and maintenance

* Significantly reduces the cost of manual meter reads

* Facilitates long-term investment to improve reliability and to modernize the system

* Establishes more predictable, less volatile rates for customers

Enhances customer service & options

* Enhances customer service and reduces estimated gas bills

* Creates new opportunities for customer choice

* Improves information for the development of new energy efficiency programs

* Provides $5 million for programs to help customers manage their energy usage and lower their costs

Maintains strong utility oversight & review

* Retains strong Illinois Commerce Commission (ICC) oversight and review

* Makes utility reporting open and transparent to hold the utilities accountable

* Creates utility performance improvement metrics and establishes annual goals

* Creates financial penalties to ensure the utilities meet annual performance goals

* Penalizes utilities, removing them from formula rates if customer rate impact limits are exceeded

* Ensures the utilities invest in and modernize their infrastructure

* Continues to require utilities prove that their actual costs of delivery services are prudently incurred and reasonable in amounts consistent with ICC practice and law

Reduces greenhouse gas emissions & supports energy efficiency

* Reduces leak call vehicle and construction equipment emissions

* Eliminates tens of thousands of meter reader vehicle miles annually

* Cuts thousands of manual field data recording vehicle trips annually

* Reduces Class 3 leak emissions (carbon dioxide) by 20%

* Improves information for the development of new energy efficiency programs

"The Natural Gas Modernization, Public Safety & Jobs Act requires crucial investment in the state's infrastructure and workforce, giving Illinois a much-needed economic shot in the arm by creating and supporting 1,250 jobs statewide," said Glyn Ramage, Business Manager LIUNA 12 Counties. "We urge the legislature to pass this bill and put people to work modernizing these critical systems."

Organizations supporting SB 1665/HB2414 include: Illinois AFL-CIO, Illinois Business Roundtable, Illinois Hispanic Chamber of Commerce, Laborers International Union of North America Midwest Region (LIUNA), LIUNA Local 100, LIUNA Local 459, LIUNA Twelve Counties Southwestern Illinois District Council, Plumbers & Fitters Local 101, Plumbers & Fitters Local 360, IBEW Local 51, IBEW Local 309, IBEW Local 649, IBEW Local 702, Chicago Federation of Labor, Construction & Laborers' District Council of Chicago and Vicinity, Utility Workers Union of America, Gas Workers Union Local 18007, Pipefitters Local 597, Operating Engineers Local 150 and Teamsters Local 786. More information is available at www.EnergyFutureIL.com.

Ameren Illinois delivers energy to 1.2 million electric and 806,000 natural gas customers in downstate Illinois, and our mission is to meet their energy needs in a safe, reliable, efficient and environmentally responsible manner. Our service area covers more than 1,200 communities and 43,700 square miles.

For more information, visit AmerenIllinois.com or find us on Twitter @AmerenIllinois.com. For more information on the Natural Gas Modernization, Public Safety and Jobs Act, visit EnergyFutureIL.com.

SOURCE Ameren Illinois