Legislators Split on Effect of New ComEd Law
State Senate President Cullerton praises new legislation to New Trier Democrats. Biss, Garrett and Nekritz disagree.
Power outages arising from a string of severe summer storms were on the mind of a number of people who came to hear state Senate President John Cullerton (D-Chicago) give the New Trier Township Democratic Organization an update on legislative affairs Sunday in Winnetka.
“Is something being done with an eye to reducing the problems with ComEd (Commonwealth Edison),” Ed Bancroft of Winnetka asked Cullerton. “Will the power outages be reduced?”
Cullerton took the opportunity to tell Bancroft and the rest of the crowd of more than 30 people at the Winnetka Community House about the latest legislation to regulate ComEd.
On Oct. 26, the General Assembly voted to override Gov. Patrick Quinn’s veto of smart grid legislation after tweaking the bill with additional consumer protection.
“ComEd is going to fix the grid by spending $2.5 billion,” Cullerton said. “When they spend the $2.5 billion, they will be able to go to the (Illinois) Commerce Commission (ICC) and get reimbursed. It’s a very, very fair bill.”
Cullerton explained the ICC will retain its oversight over ComEd. “ComEd will be better,” he said.
New Law is 'Corporate Giveaway'
One of Cullerton’s colleagues who was at the event, state Rep. Daniel Biss (D-Evanston), disagreed with Cullerton. Biss voted against the original bill and to sustain Quinn’s veto. He sees the new law as a corporate giveaway at the consumer’s expense.
“The new legislation did not increase the penalties enough and the return on equity is too high,” Biss said. “It’s still a good deal for ComEd at the consumer’s expense.”
Biss has previously said failure for ComEd to perform according to established standards should cost the utility more than it can afford. He also fears the failure to put a cap on the company’s potential return on its investment is too great a risk for Illinois’ citizens.
Under the current legislation, ComEd will reap a return on its $2.5 billion investment at 5.8 percent above the prevailing rate for U.S. Treasury securities. Those instruments are at an all-time low, according to Biss. Should they return to historic levels, the utility could reap a windfall.
Cullerton: Legislation Protects Consumer
While Cullerton believes the new legislation has sufficient consumer protection, state Sen. Susan Garrett (D-Lake Forest) voted to sustain the governor’s veto. She would prefer a cap on the return. She would rather leave regulation to the ICC.
“I wanted this tied to the trailer (companion) bill, which would hold ComEd accountable for performance and communication failures,” Garrett said.
On Oct. 11, Garrett, state Rep. Karen May (D-Highland Park) and state Rep. Elaine Nekritz (D-Northbrook) appeared at a news conference with the Northwest Municipal Conference. The organization represents many of the communities in the northern suburbs.
Numerous elected officials and managers from communities in the northern suburbs urged the legislature to sustain the veto at that event. Garrett and Nekritz wanted the veto upheld while May voted for the new proposal.
May believes the companion bill gave consumers sufficient protection and held ComEd accountable. She also said service would improve service with a better infrastructure.
“We got a lot of improvements,” May said. “It’s not perfect, but we need to invest in our infrastructure.”
The companion legislation requires improved operation from ComEd in a number of areas including reliability in hard hit areas, communication and overall performance. Failure will result in financial penalties.
Compromise Nets Degree of Accountability
Officials from the Northwest Municipal Conference withdrew their objection when they received sufficient assurances ComEd’s performance and communication would improve.
“They (ComEd) agreed to enter into an agreement with us which we can file with the ICC,” Glenview Village Manager Todd Hileman said.
Hileman spearheaded the group of municipalities seeking better service at Garrett’s behest. “It’s not ideal but we’re happy with the accountability,” he said.
Municipalities throughout the northern suburbs will be able to seek compensation from the ICC should ComEd violate the agreement. For Hileman, it is a compromise, not perfection.
“We would rather have it contained in legislation,” he said.