Regulator's Staff: Utility's Methodology For Classifying Costs Between Default Service and Delivery Does Not Demonstrate Material Misallocation Which Would Warrant Further Action At This Time; Staff Offers Recommendations On Cost Information Collection

Staff of the Illinois Commerce Commission said in a report that, "while Ameren’s allocation methodology is not without limitations," the information reviewed by Staff and Ameren’s practices, "do not demonstrate a clear or material misallocation of costs between supply and delivery services that would warrant further Commission action at this time."

The report was an outgrowth of an electric rate case order

The Illinois Competitive Energy Association and Retail Energy Supply Association had raised concerns about the potential misallocation of costs between supply and delivery at Ameren

Staff in the report said, "ICEA-RESA does not identify specific cost categories that are improperly assigned between supply and delivery functions, nor does it demonstrate that Ameren’s current methodology results in a measurable or material misallocation of costs."

"Accordingly, Staff does not recommend that the Commission initiate a separate proceeding to further evaluate cost classification," Staff said

Staff further said that any examination of cost allocation between supply and delivery is inherently tied to a distribution service revenue requirement, and is thus better addressed in a rate case

While Staff does not recommend immediate changes to Ameren’s allocation methodology, Staff said that certain areas would benefit from "further evaluation" in a future rate case or similar proceeding

Staff noted that Ameren has identified "limitations" associated with certain data for categorizing customer service calls, including calls which address multiple issues

Staff recommended that Ameren "consider" enhancements to its call center data collection practices, including the development of categories to capture customer interactions involving multiple issues or unclear classification.

"To the extent such categories are developed, the Company should evaluate reasonable and supportable methods for assigning those costs between supply and delivery functions, including approaches that reflect the underlying mix of activities associated with those interactions, such as customer mix or proportion of call types," Staff said

Staff stressed that Staff is not recommending that Ameren immediately incorporate customer interaction data into Ameren's allocation methodology.

Staff said that, in Ameren's next rate case or similar proceeding, Ameren should include:

• a detailed narrative explaining its customer interaction tracking practices and the extent to which customer interaction data may be relevant to the evaluation of customer-related cost allocation issues.

• a description of the customer interaction data currently collected by the Company, including "reason for call" categories and identified limitations associated with the data;

• a discussion of any planned enhancements or refinements to the Company’s customer interaction tracking practices, including treatment of calls involving multiple issues or unclear categorization;

• an evaluation of whether customer interaction data may reasonably support future analysis of customer-related cost allocation methodologies;

• where the Company determines refinements are appropriate, an explanation of its proposed methodology, implementation approach, and supporting rationale; and

• an explanation of the principal customer-related cost categories supporting the Company's allocation methodology, including the basis for assigning those functions to supply, delivery, or shared activities where applicable.

Docket 25-0083