Battle lines being drawn in Springfield in fight over utility rates

From CUB Voice Winter 2014 issue and Interview

Consumers face $1.5 billion in potential rate-hike fights in 2015, including major battles with ComEd-parent Exelon and AT&T in one of the most important Springfield legislative sessions in years.

Every legislative session is key to our utility bills, but it’s rare that we have to fight so many giants at once,” CUB Board President Robert Craig Neff, of Northbrook, said. “Energy and telecom lobbyists are invading Springfield, and they want to jack up your bills.”

CUB’s battles at press time:

• $580 million Exelon boost. ComEd’s parent company, which has made $20 billion in profits in the last decade, wants to boost revenue by up to $580 million at the expense of consumers.

• $300 million Central/Southern Illinois rate hike: Coal-plant operator Dynegy reportedly wants Ameren to join an East Coast power grid that could jack up electricity rates by an estimated $300 million in Central and Southern Illinois. Dynegy sells power to Ameren in a power grid called the Midcontinent Independent System Operator (MISO). To boost profits, Dynegy has indicated that it wants Ameren to switch to a more expensive power grid operator, PJM Interconnection, which serves customers in Northern Illinois and the East Coast.

• Campaign to save low-cost home phone service: AT&T and Frontier want complete phone deregulation, a move that would strip 2.7 million customers, including some of the state’s most vulnerable citizens, of the most affordable and reliable home phone service in Illinois.

In 2015, with the Illinois Telecommunication Act up for review, the companies want to end the “obligation to serve” requirement, which would allow them to abandon areas deemed “unprofitable.” AT&T also is pushing to kill the CUB-created Consumer’s Choice plans, low-cost phone deals that have saved consumers an estimated $10 million.

• In addition to these Springfield battles, CUB is juggling a case to capture a $200 million Nicor Gas refund, a challenge of about $400 million in new 2015 ComEd and Ameren delivery rate hikes and a $107 million rate-hike request from Peoples Gas and North Shore Gas.

Comments from Illinois Coalition Against Unfair Utilities:

Alberto Altamore is founder and president of the Illinois Coalition Against Unfair Utilities, which he launched in 1996. Regarding the proposed rate hike, he said: “It doesn’t surprise me that ComEd is trying to get rate hikes this year. Do they deserve a rate hike? Absolutely not! They [rates] are much higher than other neighboring states. We have the highest rates in the Midwest and third or fourth highest in the nation. ComEd has always been higher than any other Illinois rates. At one time, we had the most nuclear power plants before electric deregulation came about. They don’t own the power plants any more. They want to sell them at a certain time. There is plenty of electricity, and cheaper at that. Does ComEd deserve a rate increase? Absolutely not.

We have the highest rate in the state of Illinois. Down south, from Peoria on down, there are three main utilities. We have always had the highest rate here in Illinois and the surrounding states. For many years, we were highest in the country. ComEd owned the most plants of any utility company. As far as power plants, they produce a tremendous amount of power. When these power plants were built, they assured all us consumers under the plan that once these plants were built, [the rates would go down.] A good example is the Byron Nuclear Plant. At that time, I was opposed to the power plant because of the accidents like Three Mile Island. ComEd said, we had to build this power plant, and that once we built it, they told us, your electricity will be so cheap, we won’t even need to use meters because production is so cheap. What a joke that was! Because that obviously didn’t happen, and we have the highest rates in the entire Midwest and third or fourth highest in the country.

Let’s not forget the enormous salaries they pay their CEOs and other administrators — the gross inefficiencies of ComEd.” Reflecting on the beginnings of the Coalition, he said: “The work that I did was not only with electricity distribution but Nicor Gas and Customer Select programs with the telephones, the cramming and slamming of the telephone industry. We worked on it during electric deregulation. The real problem we need to tell consumers about is when we had a different company, and we got some good rates other than ComEd. The city was getting the bundle rates for all residential customers. We were at about 4.5 cents per kw hour. This year, electricity at the city went with Constellation, and the current rate is almost 7.5 cents per kw hour. The City has said that was the best they could do. There are five companies cheaper than Constellation, plus people don’t know that Constellation is a subsidiary of ComEd, which is owned by Exelon.

They do not deserve the rate increase, but the real problem in the future will be the smart meters. I am totally opposed to them because about three years ago, the ICC [Interstate Commerce Commission] passed this legislation so everyone will get new meters in the future. I am totally opposed to that. People will not even be able to read their own electric meters. We as consumers have a right to know what our consumption is and be able to read our own electric meters. The smart meters will all be computerized, and we won’t have that ability. Officially, I am totally opposed to any rate increases, but the worst is yet to come — smart meters.”

From the Dec. 24-30, 2014, issue

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