Illinois Power Co. Friday reported a first-quarter loss of $348.4 million resulting from a writeoff of $346 million because of denial of a rate increase sought by the company to pay for its Clinton nuclear power plant investment.
A year earlier, the Decatur-based utility earned $62.3 million, or 76 cents a share. Revenue slipped to $327.3 million from $333.6 million.
The latest quarter also includes a $14 million one-time cost for implementing provisions of a cost-cutting program designed to permanently reduce the utility`s operating budget by about $30 million a year.
The charge will almost certainly result in a loss for all of 1989. A week ago, Illinois Power directors voted to suspend the common stock dividend of 66 cents a share effective in the third quarter.
The state`s second largest utility had been seeking a phased-in, 30 percent rate increase that would have generated an additional $256 million a year at the end of the phase-in period. Illinois Power said it needed the funds to pay for its stake in the $4.25 billion Clinton facility.
However, the Illinois Commerce Commission on March 30 voted to grant the company only a one-time, 6.9 percent increase that raised rates $60.5 million. And the ICC ruled that at least $666 million spent on the plant was
”imprudent” and cannot be recovered through higher rates.
Illinois Power said it will appeal the decision.
The company said that ”if the efforts to resolve ratemaking issues ultimately fail, on rehearing or in a subsequent court challenge, the ICC order could result in an additional after-tax writeoff of as much as $780 million.”
