Wednesday, June 01, 2011

'Smart grid' passes, but Quinn vows veto

By Jamey Dunn

Lawmakers approved a measure that would allow Illinois’ two largest utility companies to raise rates to fund power grid upgrades, but Gov. Pat Quinn has vowed to veto the bill.

Senate Bill 1652 (House Amendments 1, 2 and 3) would allow Ameren and Commonwealth Edison to increase customers’ rates 2.5 percent annually to pay for improvements to the state’s electric grid ranging from basic repairs to poles and lines to cutting-edge technology that could allow utilities to prevent outages and customers to track their energy usage. The companies would be required to invest a total of $3.2 billion in the grid over 10 years. The measure also requires ComEd to create 2,000 new jobs through the plan and Ameren to create 450 jobs. If they do not meet those goals, they will be subject to fines.

Opponents said rate increases might be too much to ask of families coping with the economic downturn and recent income tax increase. “I’m concerned about the impact that higher rates are going to have on our consumers who are already struggling right now in these tough economic times. … And I’m not sure that right now is really the time to add an increase in their utility bills,” said Sen. Linda Holmes, an Aurora Democrat who cast a “present” vote on the bill.

“Sometimes we’ve got to do what we’ve go to do,” said East Moline Democratic Sen. Mike Jacobs, who sponsored the plan. “If we’re going to have success in the 21st century, we need to have a 21st century grid”

Supporters said that to hang onto manufacturing jobs and attract new businesses to the state, Illinois needs improvements to a grid that they claim is frightfully out of date. They said the improvements to the grid could eventually lead to savings and greater reliability for customers. “You’ve got to invest in your electric infrastructure to keep businesses here, and to keep my grandmother and my elderly mother from having their air conditioning go out — which happens a lot. Far too often,” said Sen. Kirk Dillard, a Republican from Hinsdale.

Dillard said consumers cannot expect the utility companies to invest in upgrades without knowing they will be getting some money to direct toward improvements.

However, Doug Scott, chairman of the Illinois Commerce Commission, which signs off on rate increases and would oversee the utilities under the plan, says that the bill strips away too much regulation. “In the normal circumstance, our review serves a check to companies to spend money only on the items they are allowed by law. … We think that this bill significantly weakens that check and provides no real incentive for the companies to control their costs.”

Scott added that the rate increases the utilities are seeking include some costs that should not be passed on to the customers. “It’s not just about smart grid, and it’s not just about infrastructure. All of the costs of the utility are built into the new procedure that’s set up. … It’s not just meters and poles and cables or even personnel. But it’s attorney fees advertising, charitable contributions, pensions bonuses for executives — everything.”

Jacobs said if the state does not move forward on the plan, Illinois could be left behind when it comes to smart-grid innovations. “If we don’t spend the necessary resources, we will lose the opportunity to modernize our grid.”

As for Quinn’s opposition, Jacobs said: “If he vetoes it, I’ll override him. That’s what will happen. And I think the House will override him, too.” The bill, however, did not pass either chamber with enough votes to override a veto.

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