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Rate rage roundup - The morning after

Wednesday, Feb 28, 2007

* We’ll start our coverage with today’s Tribune story

Lawmakers, school officials and mayors lashed out at utility companies Tuesday in a rare public hearing before the full House, saying skyrocketing electricity bills are forcing consumers to choose between food, medicine and heat.

“I can’t begin to describe the crisis and calamity going on,” said Rep. John Bradley (D-Marion), sitting by a bundle of constituents’ bills 2 feet high. “The scales of justice in this state are out of whack.” […]

The hearing unleashed pent-up rage over bills that began arriving in consumer mailboxes about the time House Speaker Michael Madigan and Senate President Emil Jones reached a stalemate over how to address one of the biggest pocketbook issues the two Chicago Democrats have faced in years.

* Meanwhile, ComEd claimed they don’t have a rate problem up north, and blatantly threw Ameren under the bus

“Yes, there’s a serious issue in the state of Illinois,” Clark said. “But it’s not all over Illinois and 75 percent of the customer base in Illinois is not having that problem. Now do we need to address the situation in southern Illinois? Absolutely.”

* Sun-Times

Madigan said he’s “still very hopeful” that the Senate will support another freeze, even though Senate President Emil Jones (D-Chicago) stymied a similar plan in January.

Ameren and ComEd executives have said another freeze would wreak financial havoc on their companies.

* Madigan called the ICC-imposed “reverse power auction” nothing more than a fix

“That auction is nothing more than a fix,” Madigan said. “It’s a fix for Exelon and other large power producers that can produce power at costs so low that when you compare the cost of producing the power against the price set by the reverse clock auction, there’s enough spread (that) the financial houses from New York have become buyers and sellers of power in Illinois. That’s not right.”

* And Ameren offered up a “compromise“…

The president of Ameren’s Illinois utilities, facing a roomful of angry state lawmakers Tuesday, vowed one-time partial refunds to Illinoisans who have been socked with unusually high power bills this month — a $20 million gambit apparently designed to persuade the Legislature not to re-regulate electric rates.

* But as I told you last night, when I was the first to run a brief piece on the Ameren proposal, the Speaker turned thumbs down, claiming the Ameren offer (which totaled $35 million) was insufficient.

* Lawmakers comment on electric rate hikes

* Outlining the program options offered by ComEd

* And a Daily Herald semi-blogger registered his complaints.

Making the management of the proceedings even more questionable was the fact that it was 7:30 p.m. before the Ameren CEO took the witness stand to explain why some of his company’s customers are seeing power bill increases of 200 to 300 percent and tell lawmakers what he planned to do about it. Scott Cisel, the Ameren CEO, outlined an 8-point plan of customer relief only to have it largely dismissed by downstate members who openly accuse the company of lying to them about the effects of rate hikes.

But by then, Mayor Daley was being declared the winner of yet another term in Chicago and across the state, media attention was turning to key local races, particularly downstate where there aren’t the resources in many media markets to cover both the hearing and the elections. And, unlike the hearing, the elections were producing results Tuesday night.

At nearly 11 p.m., ComEd’s CEO still had not testified or taken questions.

* Soundclips from committee of the whole hearing [Madigan’s full statement will be posted later this morning in the subscriber-only section]

- Posted by Rich Miller        

  1. - Ghost - Wednesday, Feb 28, 07 @ 11:23 am:

    There needs to be a compormise. A power buisness needs to be able to charge an amount that allows it to run a profitabkle business. A company cliaming it is on the verge of bankruptcy begs the question of what is its real financial shape. To my simple persepctive, any discussion about rates needs to begin by having ameren etc open up their books and show what it really costs them to provide power to illinois residents. from their rates should be set. If the companies fairly need the increase because we kept the rates artificially low, then perhaps a phase in plan. If the rates are higher then actually needed so that the companies can use the long freeze as an excuse to reap large profits, this should be stopped.

    Alternatively, move to Springfield and experience govt. owned power :)

  2. - RickG - Wednesday, Feb 28, 07 @ 11:33 am:

    Kudos to ComEd for publicly admonishing Ameren. If I were a ComEd publicist I’d be slamming them top to bottom, because it only makes my company look better by comparison.

  3. - Way Northsider - Wednesday, Feb 28, 07 @ 12:11 pm:

    Rich - thanks for this post. It is a complicated topic and you have made a really nice job of organizing the information. I don’t have a comment on the subject contents themselves but did want to let you know your work is read and appreciated. I hope you keep covering this and also the gross receipts discussion.

  4. - Whizbang - Wednesday, Feb 28, 07 @ 12:12 pm:

    Finally…. somebody in the GA understands at least part of the sham. Madigan’s comments about the auction are refreshing although nothing will probably happen to rectify the situation. Now if we can only get them to understand how the utility holding companies sold fully depreciated plants to their generating arms for full prices and are now figuring those into the rates. Good luck folks.

  5. - Cynthia Munoz - Wednesday, Feb 28, 07 @ 12:55 pm:

    Certain groups like UNO supposedly helping minorities and speaking for the community really sold out to ComEd and Peoples Energy. They went with the grant money and Big Business and not with the people or consumers. How do groups like this have any credibility?

  6. - Westside - Wednesday, Feb 28, 07 @ 1:07 pm:

    These problems started 10 years ago when they passed the rate freeze. Inflation has happened to everything expcept electric rates. These companies are in business to make profits and I am sure there cost have gone up in the last 10 years and it has to passed on to the consumer. This law should have never passed because in the long run it was not in the consumers best interest but it made the Reps back then look like heroes and that is what they were looking for.

  7. - Gregor - Wednesday, Feb 28, 07 @ 2:09 pm:

    All these polls are twigging just now that if this doesn’t get fixed pronto, they are all out of jobs next election. Unless they got enough under-the-table cash from the lobby groups to retire on, they need to “Come To Jesus” immediately.

    Months before the freeze ran out, I predicted that the ultimate compromise would be a gradual ramp-up of rates over several years. The power companies should have curtailed their greed up-front and pretended to amke “reasonable” increases of a percent or two. Like in that story of the frog in the pot full of hot water: if you raise the temp slowly enough, he never thinks to jump out, until he’s cooked and it’s too late.

    the utilities instead threw kermit in the microwave and set it on “glow in the dark”.


    Now the pols have no other recourse but to make a big show of re-freezing the rates and then thawing them out more gradually next time.

    BTW, where the heck is Rod? Hiding out until someone else solves this mess he helped create with his padded boards and commissions? How much did HE get from utilites to contribute to the campaign?

  8. - TellAll - Wednesday, Feb 28, 07 @ 2:15 pm:

    Many voters are now wanting to know about who received contributions from Ameren and its affialiated PACs, and some mention is made about the possibility that AmerenCIPS’s chief spokesperson may be the Chairman-In-Waiting of a county Republican Central Committee; it’s very, very, awkward.

  9. - Squideshi - Wednesday, Feb 28, 07 @ 2:44 pm:

    Nice ploy by ComEd. Keep the rates low until the threat of action has subsided, THEN raise the rates.

  10. - Mr. CUB - Wednesday, Feb 28, 07 @ 3:29 pm:

    Did Frank Clark have anything interesting to say when he testified? Was anybody still awake?

  11. - Frank Booth - Wednesday, Feb 28, 07 @ 4:39 pm:

    Mr. Clark talked about how many hi-efficiency light bulbs ComEd gives out and how they need to educate people about the bulbs because most people think they’re ugly (the bulbs) and don’t want to use them.

    Then Rep. Mary Flowers began quoting from Wikipedia entries about the California blackouts and asking him to respond.

  12. - Disgusted - Wednesday, Feb 28, 07 @ 7:05 pm:

    I understand profit and loss, however, I also understand marketing and bad publicity. If both these monopolies do not show their true costs, including the pots of gold and golden parachutes their executives receive and show that they are essentially buying electricity from themselves and selling it to us at these outrageous rates, their good name is going in the outhouse.

    And if they suddenly find the money, in their supposed nearly impoverished state, to buy a nukie in Texas, then they can kiss their credibility and any support from the public goodbye. And by the way, where is Milarod?? Chickens–t.

  13. - Sango Dem - Wednesday, Feb 28, 07 @ 7:47 pm:

    Does Emil Jones not realize that he’s destroying what remains of the Democratic Party in downstate or does he just not care?

    Ameren was already a criminal organization run by crooks and now they’re abusing their monopoly power to rape their unwilling costumers. I hope most of downstate decides to start public utilities and co-ops after this. The private sector is NOT WORKING!

  14. - DRB - Wednesday, Feb 28, 07 @ 8:17 pm:

    Just remember everyone, this is entirely the Democrat party who brought on this rate increase. The Dems could have done something to help control this. Instead, they did nothing.

  15. - State Worker w/ MBA - Wednesday, Feb 28, 07 @ 9:02 pm:

    “These companies are in business to make profits and I am sure there cost have gone up in the last 10 years and it has to passed on to the consumer.”

    Ameren made something like 650 million profit in the 4th qtr of 06. How much do they need?

  16. - Team Sleep - Wednesday, Feb 28, 07 @ 11:06 pm:

    DRB, the GOP controlled the Senate and the Mansion in 96-97. They are as much to blame, and not extending the rate freeze last spring or fall could have resulted in a halt of power supplies.

    Let’s not forget that people in Southern Illinois paid less for years as a result of frozen rates and all-energy incentives. Also, I wish that politicians like Mike Bost and John Bradley would show some concern for sky-high property taxes in the suburbs. Those paying very high rates are also faced with major issues, and what are we to tell them? Move or live with it? Tough? That’s not fair, and people south of I-80 need to remember that nugget.

  17. - Madison County Watcher - Thursday, Mar 1, 07 @ 11:14 am:

    Who is the “chairman in waiting” of a GOP county organization that is also spokesperson for AmerenCIPS? Or what county are you referencing?

  18. - Anonymous - Thursday, Mar 1, 07 @ 6:33 pm:

    ComEd is not completely innocent here.

    They pulled the rug out from under us all-electric customers (after enticing us with discounted rates) without clear advance warning that their rate increases would be a lot more than the publicized 25 percent.

    The new rate schedules should have been mailed to customers several months ago so people could make energy saving changes in advance, but they only arrived with the second bill at the new rates.

    They’ve also offered few tips on how to save energy to reduce bills, when customers need the help the most.

    While the surprise hurts, I’m otherwise glad for the extra incentive to figure out more ways to save energy.

Sorry, comments for this post are now closed.

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