Citizens' groups unite to unplug ComEd rate hike

Illinois Attorney General Lisa Madigan’s office has joined forces with consumer groups to extend the Commonwealth Edison rate freeze, citing a lack of competition in the marketplace.

Gov. Rod Blagojevich is also considering calling the legislature back into special session to hold a vote on the freeze.

Madigan’s office, along with the Public Interest Research Group (PIRG) and Citizens Utility Board (CUB), held a press conference Sept. 28 to get the word out that it’s not too late to stop the expected 22 percent-26 percent increase. Madigan is challenging the rate hike in appellate court on the basis that it violates basic consumer protections of the Public Utilities Act.

The Illinois General Assembly restructured the electricity market in 1997 with the promise of lower electric bills and a choice in the marketplace.

“We’re getting higher prices on our electricity bills next year, and we still don’t have a choice in who provides our electricity,” PIRG Executive Director Brian Imus said. “That doesn’t have to be the case. We just need our state lawmakers to take action. The General Assembly just can’t take a wait-and-see approach to this problem anymore.”

Imus warned that consumers could see an increase on their ComEd bills as early as February.

House Bill 5766 would extend the current rate freeze by another three years. Up for vote during the November veto session, the coalition urged consumers to tell state lawmakers they support the bill.

Imus also pointed out that the rate freeze was extended just two years ago.

“This principle applies today.” Imus explained. “We still don’t have competition, rates are going up, and we need the Illinois General Assembly to extend that rate freeze for another three years.”

ComEd External Affairs Manager Paul Callighan disagreed, stating there is an active competitive market. He added that more than 50 percent of the state’s industrial commercial load is being sold by other companies, and attributed any lack of competition to the current rate freeze.

“No one’s going to come in to try to sell you something if the price is an artificially low price,” Callighan continued, “which is just not a reasonable situation to be able to continue to provide reliable power.” Ben Weinberg, of the attorney general’s office, wholeheartedly opposed Callighan’s assertion.

“They want the members of the General Assembly to forget ComEd’s promises that competition would develop,” Weinberg retorted. “Now they say, ‘If only prices were higher, and we get to make a lot more money, and our corporate parent gets to make billions, then retail competition will develop.’”

Weinberg alleged it was a bait-and-switch scheme which could be illegal under the Public Utilities Act.

Callighan noted that ComEd plans to phase in the increase over three years, not to exceed 10 percent a year. ComEd has also pledged assistance for low-income households, and to promote an energy conservation campaign to help keep rates down.

Callighan sympathized with the fact that no one wants to see a rate increase, but said: “That ignores the fact that you’re requiring the electric utility to go on the power market, buy power and buy into the high price and then sell it at a low price. That’s totally unreasonable.”

Callighan said the 22 percent increase is not out of line with other energy price increases, as with natural gas and at the pump. He added the increase would still be below 1995’s record-high prices.

“In addition to being illegal, it’s unfair,” Weinberg alleged, citing that 90 percent of the state’s power comes from Exelon nuclear plants like the one in Byron. “Illinois businesses and residents should benefit from that. That shouldn’t just get shipped out to the East coast, where it can earn the highest price.”

Weinberg went on to attack the auction process on which the rate hike is based.

“There’s no transparency,” Weinberg said in regard to the auction’s bidders. “We have no idea what price they bid, we have no idea how much electricity they bid into the auction.”

“The fundamental problem with the whole system is that it presupposes a competitive marketplace that doesn’t exist,” CUB Executive Director David Kolata added, again referring to the 90 percent homegrown power. “All you’ve really done with this system is insert middlemen into the process who, of course, mark up the price and sell it right back to us with their profit margin built in.”

“It would be one thing, maybe, if ComEd was hurting financially,” Kolata explained. “But Exelon, the company that owns ComEd, has record profits, record earnings and a record share price, and is actually cutting rates in other states.”

Former Mayor of Rockford and current Illinois Commerce Commission (ICC) Chairman Charles Box cut the Exelon/ComEd rate hike request by 98 percent, from $345.6 million to $8.3 million, but oversaw approval of the auction process that set the rate-hike fight.

The coalition went on to say Illinois electricity rates are already above the national average and alleged the expected increase would put our rate 25 percent above those of other Midwest states.

“People have power,” Kolata pressed, urging citizens to contact their senators and representatives. “If the people’s voice is heard here, we believe that we can get a new plan and avoid these massive rate increases.”

The Illinois AARP has also joined forces with the coalition and has set up a hotline for seniors, to assist in contacting lawmakers. The toll-free number is 1-800-719-3020.

Consumers wishing to voice their support of House Bill 5766 are also urged to visit or call 1-800-669-5556.

PIRG’s Web site, also offers assistance in contacting lawmakers.

From the Oct. 4-10, 2006, issue

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