R2008-23 AUTHORIZING EXECUTION OF INTERGOVERNMENTAL AGREEMENT

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� . . LEGAL DEPARTMENT MEMORANDUM NO. 2008-06 February 27, 2008 TO: Honorable Mayor Osbome and City Council FROM: Steve G n, City Manager Wendy land, Corporation Counsel SUBJECT: Ameren Rate Intervention On November 2, 2007, Ameren filed a case with the Illinois Commerce Commission requesting rate increases in its gas and electric delivery tariffs which represents the cost for delivering gas or electricity to the customer's premises. For street lighting, the delivery service tariff is a significant cost of the bill to the City. The issues for the Commission would include how much of a return on investment is appropriate for Ameren and the appropriate overall costs of providing services. The Attorney General and the Citizens Utility Board have intervened on behalf of the public. No other person or entity is likely to intervene on behalf of municipalities to review the street lighting costs as the issue is unique to us. Under state statute, tariff cases have short timelines for intervention or else the proposed rates go into effect automatically. The intervener's expert testimony is required to be filed by March 14, 2008 with a hearing scheduled in late spring. A decision should be rendered by the end of September 2008. Attached is a Resolution for your consideration which would authorize the City to enter into an Intergovernmental Agreement with the City of Champaign and other central Illinois municipalities for the purpose of intervening in the Ameren/IP rate increase petition pending before the Illinois Commerce Commission. Intervention will allow the municipalities to present evidence before the Commission. This Agreement would authorize the signatory municipalities to share the cost of the intervention. The costs include hiring of expert witnesses on rate analysis and attorneys to prepare testimony, participate in the contested hearing process and generally support the intervention. R.W. Beck is the expert witness firm that will be used. Richard Balough, an expert in this area, is the attorney that will be used. His resume is I attached. The costs of intervention can vary depending on the issue to be investigated and the number of municipalities that will be working together but are estimated to range from $79,000 to $95,000. The costs are allocated based on population. Under this Agreement, the City of Decatur's costs are capped at$18,000. The City of Champaign has intervened in prior utility rate increases with the intervention resulting in lower electric bills. If the p�oposed rate increase for street lighting rate design is allowed as proposed, the City of Decatur's increased costs are estimated to be $73,000. We have discussed the intervention with the Illinois Municipal League's General Counsel. While they are unable to help with the expert testimony or attorney's fees, they will provide whatever support they are able. � If you have any questions, please call contact Wendy Morthland at 424.2807. WLM:pm Attachment cc: John T. Robinson Amy M. Waks I�