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Déjà vu all over again… and again

Thursday, Feb 14, 2013

* A Senate committee voted unanimously this week to give ComEd what it wants

Illinois legislators already gave Commonwealth Edison and Ameren the go-ahead to raise rates, in 2011. They passed a law over Governor Pat Quinn’s objections that changes the formula used to determine what the companies can charge. The new formula was supposed to get ComEd and Ameren more money they could use to pay for improvements to the electric grid.

But the utilities say it didn’t work as intended. They say regulators aren’t letting them charge what they need.

Now the companies are back , asking the legislature to pass another law, clarifying the old one. […]

Consumer watchdogs, like Scott Musser of AARP, say the new proposal is an end run around the courts and regulators.

* And now Peoples Gas wants in on the action

Peoples-backed legislation introduced in the Illinois Senate Wednesday would permit the natural gas utility serving Chicago to boost delivery rates up to 5 percent annually over the next decade.

In return, Peoples would commit to a $1.2 billion infrastructure program centered on replacing the aging cast-iron pipes underneath city streets. Under the bill, that program would have to create at least 1,000 jobs at its peak. […]

As controversial as the “smart grid” law that allowed ComEd to hike rates annually was, this bill may be even more so.

“We have serious concerns with what we’ve seen,” said David Kolata, executive director of consumer watchdog Citizens Utility Board. “Say what you will about the smart grid law, at least it had some measures in it that really are beneficial for consumers. We don’t see anything like that in this bill. We certainly don’t want to see it become law.”

The smart grid, if done right, would be very good for Illinois. Upgrading natural gas infrastructure would also be good for the state. A modern, functional infrastructure is absolutely crucial to a healthy economy, and infrastructure ain’t free, but that price tag does look awful high for no apparent reason other than ComEd got a similar deal for doing a lot more.

- Posted by Rich Miller        


11 Comments
  1. - Small Town Liberal - Thursday, Feb 14, 13 @ 1:22 pm:

    - awful high for no apparent reason other than ComEd got a similar deal for doing a lot more. -

    I don’t believe that’s accurate. Peoples has approximately 2000 miles of cast iron pipe (about half their total) in the ground, some dating back to the 1880s. They were aggressively pursuing a 20 year replacement schedule until a rider added to customer bills was overturned.

    These leaky cast iron mains are dangerous and cost an enormous amount in maintenance each year, and replacing buried pipelines in an urban area like Chicago is extremely expensive.

    ComEd got what they wanted, and now want more. I think there’s a difference.


  2. - Pfft_-_ - Thursday, Feb 14, 13 @ 1:33 pm:

    Whatever happened to the cost of doing business? Nowadays it’s more like “Gladly give me a dollar today and maybe I’ll give you a hamburger tomorrow.”


  3. - Abe the Babe - Thursday, Feb 14, 13 @ 1:50 pm:

    -The smart grid, if done right, would be very good for Illinois. Upgrading natural gas infrastructure would also be good for the state.-

    These bills were and always have been about regulatory reform and not so much about modernizing our grid. The above statement assumes that current laws and regs don’t provide avenues to recover infrastructure expenses in a timely manner. If they want infastructure spending recovered even faster then that could be done. But don’t come down to Springfield and cry jobs and smart meters when it’s really about executive bonuses, inflated costs of equity, fictitious pension assets, and weak performance standards. If these bills were such good public policies then why the need to spend $20 million in lobbying and advertising to pass the bill?


  4. - RNUG - Thursday, Feb 14, 13 @ 2:05 pm:

    Since it’s supposedly good enough for the state retirees, let the businesses get the same for their needs - 1/2 of the CPI-U capped at 3% maximum.


  5. - Loop Lady - Thursday, Feb 14, 13 @ 2:31 pm:

    The overt greed of ComEd never ceases to amaze me…
    Let’s see if the GA does their bidding for them yet again.


  6. - wordslinger - Thursday, Feb 14, 13 @ 2:40 pm:

    ComEd has the clout.

    In addition to campaign contributions, they have an awful lot of jobs to fill. I’m sure recommendations from legislators help.


  7. - walkinfool - Thursday, Feb 14, 13 @ 3:35 pm:

    Com Ed’s got the most effective allies and lobbyists in S’field.

    Fair? What’s that got to do with it?

    People’s has a better case on the merits.


  8. - other guy - Thursday, Feb 14, 13 @ 3:45 pm:

    what happened to natural gas prices going down due to all the fracking?


  9. - Abe the Babe - Thursday, Feb 14, 13 @ 3:52 pm:

    “People’s has a better case on the merits.”

    Not true. People’s has a worse case. At least on the electric side you have the potential benefits to consumers through peak time pricing, energy efficiency, and smart meters. I dont believe you needed formula rates to provide these but at least there was some rationale to the smart grid bill.

    The peoples bill is simply all infastructure. They want regulatory relief for something they are required by law to do now and something they should have been investing in already.


  10. - Going nuclear - Thursday, Feb 14, 13 @ 4:17 pm:

    In the old days, the ICC would hold extensive hearings to rule on a rate hike request. Now the utilities are coming to the legislature to guarantee a rate hike or set up a process for automatic increases. This is not a good trend. We all want to see the electric and gas infrastructure updated, but there should be an open, deliberate process to make sure the utilities justify the increases they need.


  11. - Judgment Day - Thursday, Feb 14, 13 @ 5:16 pm:

    “what happened to natural gas prices going down due to all the fracking?”

    That’s related to the price of fuel. This is all about infrastructure (pipes, pumps, backup electrical capability, software/hardware digital controls for flow management, etc., etc.). Also hopefully) an expansive inventory of spare parts and backup equipment in case primary systems fail.

    What I’d be interested in is how much of this is going to require major digging programs to replace the existing deteriorating underground lines, and if any type of liners using existing piping would function as a feasible alternative.


Sorry, comments for this post are now closed.


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