Cullerton pushes bill to boost ComEd rates
Wednesday, February 13, 2013
—Senate President John Cullerton today introduced legislation that would give Commonwealth Edison Co. the favorable rate treatment it didn't get last year from state utility regulators during contentious proceedings over how to implement the 2011 "smart grid" law.
The Senate Executive Committee today unanimously approved the measure, SB 9, after holding a hearing.
Observers say the bill is on a fast track. Supporters hope to put the bill on Gov. Pat Quinn's desk within a month.
The 2011 law allowed ComEd to increase electricity delivery rates annually under a formula. In return, ComEd would invest $2.6 billion over a decade to modernize the local power grid. The law was enacted over the governor's veto. Democrats in both the House and Senate have veto-proof majorities. Significant GOP support appears to be in hand as well, as Senate Minority Leader Christine Radogno signed on today as chief co-sponsor.
Observers predict the measure will garner veto-proof support, greatly reducing Mr. Quinn's leverage.
If the bill clears the General Assembly by mid-March, Mr. Quinn will have to act on it before the session ends at the end of May. That would allow it to become effective before summer.
Said a Quinn spokeswoman in an email, "We'll review it if and once it reaches the governor's desk."
In a release, ComEd said the bill would add about 40 cents next year to the average household monthly electric bill of $82 and about 80 cents in 2017.
"This is not new—it is part of the anticipated $3 per month that the grid modernization program will ultimately cost," the utility said. "In fact, due to the original . . . legislation impact of a first-year rate reduction, today's rates are essentially the same as before the grid modernization program began."
A spokeswoman couldn't immediately say how much in additional revenue ComEd would get if the bill becomes law. In the past, ComEd executives have said the three arcane rate-setting issues on which the utility disagreed with the Illinois Commerce Commission were costing it about $100 million a year in revenue.
The commission late last year already gave in on one of those issues — whether ComEd can earn a return on its pension asset — which accounts for much of that lost revenue.
But the bill goes further, providing ComEd with revenue it "lost" last year because of the ICC's rulings. Those charges, which would be reflected as surcharges on customer bills, would be assessed at a rate of interest equal to ComEd's weighted average cost of capital. That's currently about 8 percent.
The measure also says nothing about speeding up ComEd's deployment of "smart meters" throughout its service territory. After the ICC rulings last year, ComEd announced it wouldn't start installing the meters in homes and businesses until 2015. Initially, the utility had intended to begin deploying them in 2012.
In ComEd's release, CEO Anne Pramaggiore said, "SB 9 would allow us to get the smart grid program — and the related job creation — back on track."