Lawmakers send bill allowing utility rate increases to governor

By Jamey Dunn

The Illinois House sent a bill to Gov. Pat Quinn today that could mean rate hikes for customers of the state’s two largest utility companies.

Senate Bill 9 would essentially overrule a decision from the Illinois Commerce Commission, a regulatory body that approves rate increases and is overseeing the implementation of the smart grid plan, which became law in 2011. Lawmakers say the ICC misinterpreted the law. They say the resulting ruling could cost Commonwealth Edison an estimated $100 million annually and forced Ameren to reduce its rates by just under $50 million. The utilities want the money back, plus interest.

Under the smart grid legislation, which became law after legislators voted to override a veto from Gov. Pat Quinn, Ameren and Commonwealth Edison committed to investing more than $3 billion in the state’s electrical grid over 10 years. Under the law, ComEd is required to create 2,000 new jobs, and Ameren is required to create 450 jobs over the same period. ComEd has already created 700 new jobs under the plan. The utility has also installed 500 “smart switches” that help to prevent power outages and completed 500 projects to strengthen the grid against storm damage. But the utility companies claim that they cannot move ahead with the investments and further job growth unless the ICC ruling is reversed. “ComEd is proceeding with a portion of the core grid modernization programs, while postponing the deployment of the remainder and all smart meters until 2015. SB 9 would allow us to get the Smart Grid program — and the related job creation — back on track,” said Anne Pramaggiore, ComEd president and CEO.

Unions are supporting the bill, hoping to see the job growth continue. “On behalf of the 6,300 hard-working men and women of northern Illinois who make up IBEW Local 15, we enthusiastically support this legislation because it allows utilities to invest in their systems, grow the local economy and create thousands of new jobs — something our state needs badly,” said Dean Apple, president and business manager of IBEW Local 15. “If we don’t find a solution to deploy ComEd’s Smart Grid program as planned, our state will face a great setback. We believe SB 9 is that solution.”

The rate increases are expected to be small, likely less than $1 for most customers. However, opponents say it is unfair to charge customers more for power that they have already paid for. “They’re getting the retroactive rate hikes with interest,” said Scott Musser, associate state director for AARP. “People are going to be paying for service that they have already used.” He said that the move is part of a disturbing trend of utility companies coming to the legislature for relief when the ICC issues an unfavorable ruling. ComEd appealed the ICC ruling, and the ICC issued another ruling after that appeal. The utility is also in court with a lawsuit over the ruling. “They didn’t like what the commission did. The commission’s decision was based on the law.” Musser said, adding  that the court case should be allowed to play out. “The issue hasn’t been resolved through the appropriate legal channels. If they don’t like in the end what the court decided and they want to come back to and tweak the law, fine.”

The House approved the measure with little floor debate today, and no lawmakers spoke out against the bill. Musser said that illustrates how much sway the utility companies, which spend millions each year to lobby lawmakers, hold in the state. “In the House and the Senate, a lot of it’s the clout the utility companies have. I think it’s unfortunate nobody’s getting up on the floor and speaking about it. You’re seeing people voting against it, but you’re not getting an actual dialogue.”

A spokesperson for Gov. Pat Quinn said he plans to “thoroughly review the bill.” A representative of the governor filed as an opponent to the bill at a House committee hearing Wednesday.

For more on Smart grid see Illinois Issues July/August 2011.