After the announcement of a 40 percent rate hike for Ameren IP power users, rumors and reports about how the company will be disappointing its customers have circulated.

One recent report claims that Ameren IP is seeking to underhandedly cover up its earnings beginning Jan. 1, when the price hike will take effect for consumers.

Leigh Morris, a spokesman for Ameren IP, said that while the company made a recent filing with the commission, the reason was not to cover up their earnings.

"Our meeting had to do with transferring some of our assets in order to protect our investors and prevent insider trading," Morris said.

A recent article from the News-Gazette accused Ameren of "quietly cancelling its special winter rate" for electrically heated homes at the end of the year.

Morris said there is no such special rate in the form of a discount but rather a separate rate for users of space heating.

He also said that while the rate is fading out, the change is due to the way the company will be purchasing their electricity in the future and that a mere 5 percent of Ameren's customers will be affected.

Esther Patt, a coordinator for the University's Tenant Union, said some students living on campus may struggle with the change next semester.

"The cost of housing is going up, and for students who don't have a lot of money, a 40 percent increase would be a major hardship," Patt said. "For example, for students who rent from College Park, their landlord only pays the first $30 of every electric bill."

Morris said that while the hike may appear drastic, customers will see very little difference.

"The average customer will have an increase of about a dollar a day, and students use even less power than most homeowners," Morris said.

Morris said Ameren will be distributing information to all of the their customers about when rates increase or decrease throughout the day.

The goal is to give consumers the option of making their bill as low as it can be. He said the daytime hours are when rates are at their peak.

"At about 3 p.m., demand for power is the highest. But at 3 a.m., the demand is pretty low, while the supply remains as high as it was at 3 p.m.," Morris said.

Urbana homeowner Bridget Lee-Calfas said she is not afraid of the effect the hike could have on her power bill but can see a potential problem for her fellow homeowners.

"It seems like a drastic hike," Calfas said. "I think it will force people to be more conscientious about their power usage, but it could be a problem for lower income families."

Morris said a type of phase-in plan for the 40 percent hike, which allows consumers to choose to take on a gradual increase in rates instead of one large bill at the beginning of 2007, is in the process of approval by the Illinois Commerce Commission. He said that while the plan may help consumers, there will be a mandatory charge in interest, as Ameren would become a loaner for its customers.

Morris said Ameren IP is currently the sole deliverer of power for Champaign County and that this has occurred as a result of extremely low rates.

He added that the law does permit competitors to enter into the power market.