Editorial: We need ICC to keep a lid on utility bills
Editorials March 25, 2013 6:54PM
Transmission towers carrying powerlines of electricity tower over a motorcyclist heading west on Route 58 Tuesday in Elgin. Cities and villages in the northern Fox Valley are able to get cheaper, ÒaggregatedÓ electricity sources on behalf of all their residents and small businesses who donÕt opt out of the deal and donÕt already have their own power supply contract. Almost 30 private companies offer power via the ComEd wires. June 12, 2012 | Michael Smart~Sun-Times Media
Updated: April 27, 2013 6:10AM
Every time you get a rate increase for electricity, gas or your land-line phone — services provided by monopoly utilities — you have to wonder who is looking out for you.
Would you rather it be state legislators, many of whom take campaign contributions from those same utilities, or the independent Illinois Commerce Commission, which has been doing the job in the past?
We think the right answer is the ICC. The ICC, whose board is appointed by the governor, has been accused of being pro-utility at times, but it does have a technical staff capable of assessing complicated rate requests and giving ratepayers some protection.
Some utilities, though, have been working to bypass the ICC and go straight to the Legislature when they want more money. That’s a disturbing trend that could leave all of us paying higher bills.
We need strong oversight over utilities because they have no competition to keep costs down. Under the traditional rules, utilities get a guaranteed profit, but they must show they spend their money prudently. The Illinois Commerce Commission was created to review rate increase requests and ensure the utilities are meeting that standard.
Back in 2011, though, the Legislature approved a new system for ComEd that eliminated much of the ICC’s oversight over rate increases. The law was part of a deal under which ComEd said it would spend $2.6 billion to upgrade its system and build a new “smart grid” that would provide more reliable electricity. ComEd President and Chief Operating Officer Anne Pramaggiore said the change was needed because “we didn’t have the regulatory model to support the kind of investment that we would need.”
The lawmakers who approved that legislation were hardly working in a vacuum. ComEd and its Downstate counterpart, Ameren, and their executives and affiliates gave more than $1.3 million to campaign funds benefiting state lawmakers and their party organizations, the Better Government Association found. According to the Illinois Campaign for Political Reform, ComEd donated an average of $7,616 to lawmakers who supported the bill. On top of that, ComEd spent millions — $16.2 million according to AARP Illinois — on lobbying lawmakers and advertising, That wasn’t the end of the story, though. New efforts are surfacing to push the ICC even further into the background.
† Last week, the Illinois House followed the Senate in approving a bill to raise ComEd rates by $70 million. Gov. Pat Quinn opposes the measure, but it passed the House and Senate with a veto-proof margin. ComEd says it pushed for the bill because the utility was not recovering its actual costs in making investments.
† A separate pair of bills introduced in this session would significantly reduce the ICC’s oversight over rates for Peoples Gas, something Peoples says it needs so it can accelerate replacement of hundreds of miles of cast-iron pipes that are more than a century old.
† AT&T has floated a proposal that would allow it to do an end run around the ICC as well by deregulating AT&T’s land line phones and allowing it to eliminate state consumer protections.
Suddenly, it seems no one wants to take requests for rate increases to the ICC anymore. Scott T. Musser, associate state director of advocacy and outreach for AARP Illinois, says, “The new punching bag in Springfield is the Illinois Commerce Commission.”
The utilities can’t be hurting too badly; it was reported earlier this month that the compensation for the chief executive at ComEd parent Exelon Corp doubled last year to $10.2 million. But utility bills are the biggest expenditure for most households whose occupants are over age 65, AARP says. Those people need someone who is looking out for them, too