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SB 1652 Does NOT Guarantee 10% Profit

Myth: Opponents of SB 1652 have falsely claimed that the bill locks in guaranteed utility profit margins.

Here’s the Truth: SB 1652 sets a “target” profit margin of 10.25 percent return on equity. This is lower than the national average for utilities over the last 10 years and would be the second lowest ROE that the ICC has given ComEd in the last 30 years.

But it can still be reduced in the following ways:

1. ICC disallows costs during the annual rate proceeding. The ICC retains authority to disallow utility costs. Today, the ICC routinely disallows tens of millions of utility costs in every rate case and has authority to do so under SB 1652.
2. Utility fails to meet new performance standards. SB 1652 contains comprehensive performance metrics and a utility’s ROE is reduced if it fails to meet targets. These include performance on reliability and customer service.
3. Lower than expected demand on the system. During an abnormally cool summer or poor economic conditions, demand falls and revenues contract. This drives down the amount of revenue collected by the utility resulting in less income.

There are no guarantees of profits in 1652. For more information on all the benefits of grid modernization, visit www.SmartEnergyIL.com.