Higher electric rates in Illinois may soon jolt the South Shore commuter railroad and its riders.
The South Shore could face a substantial hike in what it pays
Metra for 15 miles of track rights from Kensington to Randolph stations, General Manager Gerald Hanas told the
Northern Indiana Commuter Transportation District board on Friday.
"They are facing different cost pressures just as everyone is," Hanas said.
Electric rates have soared in Illinois this year due mainly to the end of a 10-year rate freeze. State legislators want to again freeze rates while utilities say they may go bankrupt if rates are rolled back or frozen.
Current projections show Metra is facing an increase of 39 percent in electricity costs in 2007, according to Metra spokesperson Meg Reile.
In addition, Illinois Auditor General William Holland warned last week that Chicago area transit agencies are all facing "a serious financial shortfall."
If the South Shore has to pay substantially more for track rights, it will have to find a way to cut costs or increase revenue, said NICTD spokesman John Parsons. The higher costs could eventually affect fares.
The South Shore contract for Metra track rights expired in December, Hanas said. Negotiations have been ongoing, but have not yet resulted in a deal.
The South Shore currently pays $3.28 million annually for the 15 miles of track it shares with Metra, Reile said. That amount includes charges for electricity the South Shore's electric trains draw from the overhead cables.
In other business on Friday, the NICTD board approved a resolution to borrow up to $33 million to pay for 14 new double-decker rail cars.
JPMorgan Chase will purchase the NICTD bonds, which will carry an interest rate of 4.028 percent, according to bond counsel Michael Harris. The bonds will be paid back with federal dollars NICTD receives.
Additional money to pay for the cars will come from a combination of state and local grants, including a $17.5 million grant from the
Northwest Indiana Regional Development Authority.