Ameren's Second Rate Hike in Three Years Adds $13 Monthly; ICC Cuts Still Leave Captive Ratepayers Covering Shareholder Returns

The St. Louis Post-Dispatch reported that Ameren Illinois is seeking a second rate hike in three years, with plans to raise bills roughly $13 per month.^[1] This is not routine cost recovery; it is the visible edge of a structural problem in how Illinois regulates its largest downstate utility.

Start with the timeline. In 2023, the Illinois Commerce Commission rejected Ameren's grid plan and cut its $448 million rate-increase request by approximately 87 percent.^[7] The company then challenged that ruling, and while consumer advocates helped turn back roughly $16.5 million in additional overcharges, the commission still approved new base rates.^[7] Now, less than two years later, Ameren is back. In November 2025, the ICC cut the utility's $128.8 million natural-gas rate hike request, approving instead $73 million, a reduction of $55.8 million.^[9] In December 2025, the ICC cut another $11.2 million from Ameren's electric rate reconciliation request.^[9] Each time the commission exercises its only real lever, rate-case scrutiny, Ameren returns sooner. That is not coincidence; it is rational behavior under rate-of-return regulation.

Here is the mechanism. Utilities earn an authorized rate of return on their rate base (undepreciated capital in service). The larger the base, the larger the dollar return, even if the percentage stays flat. Ameren's rational move is to grow that base as fast as possible, file for increases frequently, and accept cuts as the cost of doing business. The ICC's cuts slow but do not stop the ratchet. And crucially, rate base growth happens through riders and trackers outside general rate cases, where scrutiny is lighter. In summer 2025, Ameren's electric supply costs surged roughly 50 percent, from around 8 cents per kilowatt-hour to around 12 cents per kilowatt-hour, adding approximately $45 per month for typical residential customers during peak months.^[4] That jumped cost flowed through a fuel-and-purchased-power clause, not a contested rate case. Ratepayers bore 100 percent of the fuel-price risk; Ameren kept the return on the generation assets that burn that fuel.

The deeper stake is invisibility. A typical Ameren bill itemizes supply costs, delivery charges, and riders, but ratepayers almost never see the authorized return on equity, the tax recovery, or the rate-case expense embedded in every line. The ICC, when it engages, can push back on claimed costs and capital spending; it did so, cutting both gas and electric proposals in 2025. But the commission approves increases far more often than it rejects them, and every month between rate cases, regulatory lag shrinks. Ameren's shareholders do not wait three years for the next general rate case; they recover costs through riders, and they file again whenever the gap between approved and claimed revenue widens. The company is not breaking the rules; the rules allow this pattern.

The alternative is rate-of-return regulation with real discipline. Illinois could adopt a multi-year rate plan that fixes revenues for three to five years, so Ameren keeps cost savings instead of filing for new bases. It could consolidate riders into base rates at the next general rate case and require sunset dates, so no cost recovery mechanism becomes permanent. It could shift to a totex approach, treating capital and operational spending equally so the utility does not favor building over buying or avoiding. And it could require earnings tests: if the utility's actual return exceeds the allowed return by a set margin, it must refund the difference or roll back rates. These are not experimental; Hawaii adopted similar measures in its 2020 regulatory reform order. Illinois has not, and so Ameren files, gets cut, and files again.