Company looks to become Ameren rival ...

Company looks to become Ameren rival in Ill.

There are 1 comment on the Chicago Tribune story from Oct 8, 2008, titled Company looks to become Ameren rival in Ill.. In it, Chicago Tribune reports that:

A new company is hoping to become an electricity-supplying competitor to Ameren across much of Illinois.

Join the discussion below, or Read more at Chicago Tribune.

ubiquityman

Greenwood, IN

#1 Oct 11, 2008
Looking at Ameren's cash flow, they make about 13% profit on your utility bill.
Of that 4.3% is paid in taxes leaving about 9.7% post tax earnings.
6.8% is paid to shareholders which is about a 4-5% yield traditionally based on stock price.
(right now it's about 9% due to low stock price and market crash).
A 4-5% return is a fairly conservative for shareholders.
This leaves 1.9% to pay off their debt, which I hope is Ameren does with revenue.
NICE already states they are paying 1% commission for electricity so that leaves 0.9%.
So, any amount that NICE can save about 0.9% would mean either:
1) Ameren is increasing their debt (not good for anyone)
2) Taxes having to be made up elsewhere by citizens (ie. zero net difference whether you pay taxes your utility statement or via income tax)
3) NICE is much more efficient at running a business then Ameren or are able to get lower electricity rates (is that really likely?)
4) Take the money from the shareholders (which isn't ethically correct, IMHO, since the shareholders put up the money for Ameren)
NICE has a 5-yr contract & $75 cancellation.
Nice, but no thanks.

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