12 Apr Can I File Bankruptcy On My Power Bill
Filing for bankruptcy? Owe money to the power company? You’ll be pleased to know you can discharge your debts to the utility company when you file for Chapter 7 bankruptcy.
Thanks to deregulation of the Illinois electric utility industry, companies such as Ameren buy power through a reverse auction devised by the Illinois General Assembly. Normally an auction is designed to bring the highest and best price from the person who most wants the item, a lesson I learned by attending country auctions with my auctioneer friends, Terry Bones Allan and Homer Henke. So who benefits from a reverse auction? You will be surprised to know financial investors such as J.P. Morgan Ventures Energy Corp., Morgan Stanley Capital Group, Inc., J. Aron & Company [think Goldman Sachs] and Constellation Energy Commodities Group, Inc., won 36 per cent of the power sold through the auction. And not one of those companies produce power in Illinois.
The bidders won the rights to sell power to Ameren, who in turn, sells it to consumers. No one seems to know, or care, where they get the juice, or why Ameren simply does not purchase it directly from the source. But it must be a profitable venture because Ameren’s sister subsidiary, Ameren Energy Marketing Company, got in the auction and won the right to sell Ameren another 32 per cent of the deal.
Meanwhile, millions of consumers are being forced into filing bankruptcy to end the nightmare of overdue power bills.
The system is drawing attention from Illinois Speaker of the House Michael Madigan and his Illinois Attorney General daughter Lisa Madigan, both of whom are calling for investigation and reform as Illinois politicians now feel the political heat generated by double and triple power bills Illinois residents received during the past cold winter months.
Not even Ameren Illinois itself supports the program, as president and chief executive officer Scott Cisel called for reregulation of the industry, as reported by Alan Ortbals, Vice President of the Illinois Business Journal [IBJ] in his April 2007 issue. The IBJ, an excellent read pro-business trade publication that prides itself on the motto, “We Mean Business. Illinois Business”, devoted a front page and opinion column to five pages of coverage on this topic. High utility costs know no economic barriers and lead many small business owners into filing for bankruptcy.
Even St. Louis Post Dispatch columnist Pat Gauen, an Ameren victim, reports in his column titled Ameren Could Have Kept Rate Fight From Heating Up the higher costs could be spread across Ameren’s 1.2 million customers in Illinois instead of just hitting the 120,000 experiencing higher bills. While ideas abound, the bills remain due, as customers face shutoff and collection lawsuits. Some are filing for bankruptcy and others, confused about their options, are losing the ability to turn on the lights at night.
Utility bills are unsecured debts and are wiped out in a Chapter 7 bankruptcy filing. If high power bills are preventing you from paying your other bills, you should consult a bankruptcy lawyer to determine your options.
Andy Miofsky, Esq.
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