Mike Leifheits June 21 column misconstrues the facts relating to ComEds rates and mischaracterizes the Illinois experience with restructuring. Lets set the record straight.
First, the average Wisconsin rate is higher than ComEds. In 2005, ComEds average residential rate was 20 percent lower than the rate paid by Wisconsin Power & Lights residential customers. In addition, ComEds commercial and industrial rate was 10 percent lower than WP&Ls commercial rate.
Second, the national average of all electric utilities is 11 percent higher than ComEds rates. In addition, the average residential rate of the top 10 large metropolitan areas is 38.5 percent higher than ComEd.
Illinois residents and businesses alike have benefited from competition over the past decade.
Over the last nine years, ComEd residential customers have benefited from one of the longest rate cuts in the countrya 20 percent reduction through the end of this year. That is remarkable when you consider that in the same time period, the Consumer Price Index has risen 21 percent, and other energy products such as natural gas and gasoline have more than doubled. And, the residential rates of four out of five major, Wisconsin-based public utilities increased by 30-50 percent from 1997 to 2005.
In contrast, Illinois residential customers will have saved $4 billion by the end of 2006 due to restructuring.
Illinois businesses have choices that businesses in other states do not, which has been another direct benefit of restructuring. Since Illinois restructured its electric industry almost a decade ago, approximately half of ComEds large commercial and industrial load has switched to alternative electricity suppliers.
And while it is true that electric rates in Illinois and across the country are going up, rates are going up because electric energy production costs are going upnot because of competition or new procurement mechanisms.
This is a national phenomenon, and these increases are seen in both regulated and restructured electric utilities. Dozens of other utilities have received, or are seeking, significant rate increases, including Wisconsin Public Service (11.4 percent), PacifiCorp, Utah (17.1 percent), Kansas City Power & Light (10.6 percent).
ComEd is concerned about the effects rate increases will have on customersespecially low-income customers. This is why ComEd has proposed a residential rate stabilization plan that would cap average residential increases to 8 percent, 7 percent and 6 percent in 2007, 2008 and 2009, respectively. Costs that exceed the caps would be deferred and recovered over three years, from 2010 to 2012.
The residential rate stabilization proposal will be a part of a comprehensive, multifaceted initiative designed to ease the customer impact as Illinois transitions to new electricity rates. Other components include a low-income assistance program, energy efficiency initiatives, demand response and environmental programs. Details on these program components will be released this summer.
Anne Pramaggiore is senior vice president of Regulatory Affairs for Commonwealth Edison.
From the July 5-11, 2006, issue