* After yesterday’s votes to override the governor’s veto of the “Smart Grid” bill and pass the companion legislation, AARP Illinois issued the angriest press release I’ve ever seen from that group…
“The General Assembly just sent a clear message to their constituents: Corporate interests and campaign cash trump the needs of Illinois consumers.
“Today, lawmakers voted to override the Governor’s veto of Senate Bill 1652 – guaranteeing higher electric rates for consumers and higher profits for ComEd and Ameren.
“At a time when consumers are struggling to make ends meet, with prices on the rise for everything from gas to groceries, taxes increasing, and home values declining, it is appalling that Illinois lawmakers would chose to further burden consumers with a law that amounts to nothing more than corporate greed.
“Under the guise of improved infrastructure, ComEd and Ameren successfully convinced the General Assembly to gut Illinois’ utility ratemaking process – a process that exists to balance the interests of consumers with that of the utility companies. This veto override has effectively silenced the voice of the consumer and tied the hands of the Illinois Commerce Commission – all while guaranteeing higher profits for two of the state’s largest monopolies.”
ComEd has said the bill will raise average household electric bills by about $3 per month to finance installation of “smart meters” throughout Northern Illinois and make $1.3 billion in improvements to traditional grid equipment.
But the bill’s actual cost to ratepayers may well be higher because the guaranteed return on equity ComEd will reap rises with Treasury bond yields, which currently are at historic lows.
State legislators essentially have boxed Quinn into a corner. After the governor vetoed the original smart grid bill, a so-called trailer bill was introduced this week that called for ComEd to make concessions. By passing that bill, legislators knew that if the governor vetoed it or signed it with suggested changes, the legislature could ignore his advice or nix the trailer bill altogether, leaving him again with the original bill, which is now veto-proof.
Sen. Kyle McCarter, R-Lebanon, rejected the idea that this is a jobs bill. He said it adds a new burden in a state that already hits businesses with high taxes, fees and workers’ compensation costs. “One of the last good things we’ve got going in this state for businesses is affordable power,” he said.
Our communities, working through the Northwest Municipal Conference, have proposed legislative recommendations to address ComEd’s communication and transparency issues. These recommendations would help ComEd better partner with our communities during storm and non-storm related outages and must be adopted as a condition of any legislation to upgrade the electric grid.
Therefore, we as mayors have no option but to urge the members of the General Assembly to uphold the Governor’s veto of Senate Bill 1652 unless the bill is amended, via additional legislation, to directly address these shortfalls by including the language proposed by local governments. Until ComEd is held accountable for providing reliable power and effective communications on good days and bad, they don’t deserve the automatic rate increases and guaranteed profits in Senate Bill 1652. Unless this critical amendment is adopted, legislators should scrap Senate Bill 1652 and rewrite the bill so that smart grid technological advances don’t come at the expense of consumer safety and well-being.
Now, after a series of meetings, those suburbs say they’ve struck a deal with ComEd to develop enforceable protocols to address storm outages in the entire territory. The details will be filed with the Illinois Commerce Commission within 45 days if the smart grid legislation becomes law, according to ComEd.
The Tribune recently reported that while a law exists to reimburse consumers affected by extreme outages, the utility has never paid under the law.
Separately, ComEd previously announced that it has established a Storm Response Process Improvement Task Force to develop and implement improvements in its storm restoration process and reliability performance.
* And one legislator who voted against the utilities was upbeat…
And even critics, like Senator Dave Syverson, who voted against the bill twice, see a positive side to the upgrade.
“Its going to be a better system a more modern system to eliminate many of the outages and under the new system ComEd will know the power outages occur rather than someone having to call them and let them know electricity is out” says Syverson.
* Legislators override Quinn’s veto on smart-grid bill
* Chuck Sweeny: Electric rates going up, thanks to Illinois Legislature
* Illinois Senate overrides Gov. Quinn’s veto of ComEd rate-hike bill
All this bill does is shift the cost from the stock holders to the ratepayers. It wont help reliability period! They save money from eliminating meter readers and charge you for the new meter and the cost to retrain the meter reader.
I am very happy that this bill passed. Last year I lost my insulin and all of my food in my refrigerator and freezer. The cost was very real and expensive but the aggravation and inconvenience of losing ones contents and medications was heartbreaking. This bill will electricity out of the dark ages and into the modern era.
As an average consumer I find this smart grid to be smart.
Could Raven’s comment be any more transparent in the fact that it is pure astroturf hokum?. ComEd spent money on ads at this blog, you can be sure their flacks are watching the comments and trying shape sentiment. This bill is garbage and everyone knows it.
@Raven - If you have another power outage, I’m not seeing anything in this bill that says you won’t be losing your insulin and food yet again. In addition, you’ll lose a little less food, since your food money will be going to Com Ed’s profits, instead of your belly.
I get why the AARP is angry, I agree with them. But as you said yesterday Rich, by not engaging in the process Quinn gets nothing where he could have maybe had half a loaf. He bears some of the blame here.
This is the process. Don’t like it? Think you’re above it? Maybe you should not be Governor. If you don’t get engaged on the big issues they will just run you over. Those are not pats of congratulations on your back, those are tire marks.
Then, the utilities tell you that it will save you money in the long run. Nonsense. It’s like every scam the utilities present that is supposed to save you energy in your home. If it actually works, your rates go up because the utilities have to make at least as much money as they are making now.
And people wonder why the OW movement is growing. It’s anger at the never ending nonsense that we get fed by corporate America that they are actually doing something for our good.
Sickening video display of please fall in line State Reps.
Methinks this was heavily orchestrated by MJM and Lang probably went along with this dog and pony show to garner support for his gambling bill from his highness.
Our leadership isn’t. If folks don’t take their disgust with them to the polls next year, we only deserve more of this. I know the electorate in IL has a high tolerance for these kinds of shenandigans, but c’mon people.
I took Springfield’s word that when they raised my taxes it was necessary for the future of the state. Cap Fax played a big role in convincing me this was necessary.
Why wouldn’t I take Com Eds word for it they need to raise prices for the future of the grid? *Especially* when Springfield blesses it? Cap Fax played a big role in convincing me this is necessary too.
aldyth-the anger should be focused at the legislators. all companies try to maximze profit, that why they are in business. The legislators could have stopped this and chose not to because of their personal greed and lust for power.
Wow, the meter is the simple part of the bill. The unbelievable part is the removal of the ICC from the rate-making process.
I hope the AARPers extract their pound of flesh, but they will likely fail to follow through.
- He Makes Ryan Look Like a Saint - Thursday, Oct 27, 11 @ 9:49 am:
This shows the disconnect between the Elected Officials and the people. If I take money and give a company something in return I go to jail….these guys get re-elected. The only way to show them how we feel is to Vote ALL of them out.
Honestly, I think Quinn should veto the trailer bill too. Make the legislators make the choice either override (VOTE YET AGAIN), work on a new trailer, or have to defend an even worse version of the bill.
They passed the bill, twice now. They can’t say they passed it because of the trailer. What really does Quinn have to lose by saying no to the trailer? Infact I think he has more to lose by signing it.
After a few weeks of challengers taking it to some of the incumbents - maybe they will come to the table and either override or redo the trailer bill.
Anyone notice the new names Raven and Nevermore are the most vocal proponents? Would an IP check show these two come from the same place?
Hey, trolls: Make it less obvious when you’re sowing astroturf.
“Ah, distinctly I remember, it was in the bleak October,
And each separate dying debate wrought its vote upon the floor.”
(with apologies to Poe, both for my mangling and the appropriation of his work for underhanded brainwashing)
People keep wondering what the Occupiers are about—this is a perfect example of corporate greed.
If a corporation wants to update their systems, the corporation need to pay for it. It has been stated in the past that at least part of the problem last Summer was due to the lack of trained repair people since they had either laid off too many people and not replaced retired employees.
Instead of spending money on commercials to sell their idea, they should have been saving the money to hire repair staff or update their system.
How about making ComEd go through BOTH the ICC and IL Power Authority as a major electricity provider and compel them to adhere to the Renewable Portfolio Standards (RPS) that must be met in the near future.
The RPS bill was shepherded through the legislature by none other than dear Sen. Harmon, so let’s let him along with the ICC/IPA hold the utilities feet to the fire, especially now that he has assured that their coffers will be flush with cash that seniors and the increasingly poor middle class don’t have lest they have a less than stellar ROI on their smart grid improvements.
I am interested to see how this new technology will be “self-healing” and increase reliability as claimed by the high-dollar utility execs. How will computerized meters replace an old rotten wooden utility pole? Also did it ever come up the debate that the utility’s previous rates have already provided money for the utilities to replace outdated infrastructure?
I think the smart grid is a good investment for the economic future of Illinois, but changing the regulation of this industry and virtually eliminating restraints on future rate increases is disastrous.
the bill explains why despite the many outages in my neighborhood no structural improvements were made. they were waiting for someone else to foot the bill. glad to see that Lisa Madigan sent out an email pushing calls to legislators despite the fact that dad pushed to go another way.
I can’t help but view the rabid opposition to this bill in some quarters as just another replaying of a familiar theme. People want ComEd to upgrade its infrastructure, but they don’t want to pay for it. Tea Partiers in Jacksonville want the State to cut spending, but not the spending that benefits them. It’s an old phenomenon - everyone wants to go to heaven, but no one wants to die.
BelleAire is right that is part of what Occupy is all about–ending corporatism. Join us this Saturday in Springfield at the Capitol, 1pm, for a rally and march. While it is symbolic, the group will be delivering an eviction notice to current occupiers of the Capitol as part of the rally & march. I have also heard rumors that there are plans to start an actual physical occupation of the Capitol grounds this weekend.
I will never vote for anyone who supported this scam.
- Yellow Dog Democrat - Thursday, Oct 27, 11 @ 11:18 am:
I wouldn’t call the AARP release “angry” — but it certainly is hard-hitting, persuasive, and on-point.
If they stick with that message through the primary and General Elections, it’ll be a long time before the GA crosses them again.
Stack up their message of “Rep. Doe voted to raise your electric rates and line the pockets of ComEd” against “Rep. Doe voted to modernize our electric grid and create thousands of jobs” and tell me who you think wins the argument.
Now, throw in links to ComEd’s political contributions too.
The senate voted for it because they were afraid mike jacobs was going to kick thier a$$
- Kevin Highland - Thursday, Oct 27, 11 @ 11:20 am:
If a smart grid is such a smart thing to do maybe the utilities should invest some of the current profits in to building it out and not have a rate increase. Then get the ROI after the build out through decreased maintenance & transmission costs.
It seems like all the utilities were built, the profits consumed and none of the profits put toward upgrade & replacement costs in the future.
My fear with the so called “smart grid” is the ubiquitous connections of the power grid to the internet. The wireless connections would be an attractive target for somebody with malevolent intentions. There will be so many pieces of equipment and the associated software sitting on the side of houses, just waiting for somebody to start rooting around to find a weakness and exploit it. There was recent news story about the potential for insulin pumps to be hacked. While there has not been any confirmed incidents of a hacked insulin pump, the manufactures are concerned enough to contact the antivirus software manufactures for assistance.
- Cook County Commoner - Thursday, Oct 27, 11 @ 12:03 pm:
If the AARPists wanted to win this one, they should have gone $1.25 for every $1.00 spent on the legislature by Excelon and ComEd. Just buy some Exelon stock, and the dividend will hedge your rate increase. I’ll bet the “friends and family” of our legislators did.
- Louis G. Atsaves - Thursday, Oct 27, 11 @ 12:35 pm:
ComEd has been rated amongst the worst in service in the country. Their responsiveness over the summer storms showed that their rating was well deserved.
I opposed the smart grid not because I am not in favor of adding this technology, but because it came with unregulated rate increases. We in Illinois rewarded a public utility with a history of rotten service with rate increases in exchange for an upgrade of service which they should have accomplished years earlier, but didn’t.
All the trailer bills in the world won’t fix the pattern of callousness towards customers. I don’t expect more work crews to be hired. And I expect the same lack of responsiveness to continue.
When you see a tree pulling down an electrical wire to within 4 feet of your garage, and it takes ComEd 6 days to respond while the wood smolders and burns, you see exactly how rotten their service is. Multiple phone calls reporting the problem were met with smarmy responses of “we’ll get right on it.”
This is one veto that the legislature should have allowed to stand.
power lines go down in storms cuz trees knock them down. the only way to stop this would be the expensive laying of underground lines funded by whom? how? hmmmmmmm. the new system would reroute power so fewer people are affected by one tree. the system would also notify comed automatically of outtages so the calling and waiting is removed from the equation.
and im still wondering what the remaining occupy is about. what exactly is the message? anti-capitalist but we need jobs? who provides jobs? CORPORATIONS!
the bill was amended earlier to provide ANNUAL icc review and oversight. standards are set for evaluation and penalties are paid by comed if standards arent met. the trailer bill had a provision for seniors and low income families.
the current lack of reliability CANNOT be your argument for lack of improvement.
This is why people are mad. ComEd says one thing to consumers, but here’s what parent company Exelon says to investors:
Our delivery companies are also achieving constructive financial and regulatory progress.
ComEd is targeting an earned ROE of at least 10% over the long-term. ComEd has an electric distribution rate case pending in Illionis, with final approval expected in May 2011. In 2008, the Illinois Commerce Commission awarded ComEd a $274 million revenue increase for electric delivery service. The ruling will enable ComEd to continue to underwrite infrastructure improvements and advance efforts to develop Smart Grid technologies.
I’d like AT LEAST 10 percent over the long term, too.
And forgive my tinfoil hat, but if a utility company dials back on tree trimming for a few years, they are almost assured of widespread outages during the summer storms — just at the time they’re asking for rate increases. I’m not saying, I’m just saying…
The baby boomers and above do not want to pay for necessary upgrades or their past mistakes. You can blame Ds and Rs for our problems but I would focus on their voters. Young voters burden will not be world wars or civil rights, it will be paying for our parents mistakes.
“the bill was amended earlier to provide ANNUAL icc review and oversight. standards are set for evaluation and penalties are paid by comed if standards arent met. the trailer bill had a provision for seniors and low income families.”
Annual Rate Cases = Annual Rate Increases NOT more oversight. The ICC, and AG have testified repeatedly on this.
The standards were written by ComEd and can be met in their sleep and in case they are sleeping too soundly, the penalties are nothing compared to the financial windfall from this bill.
The “assistance” money is going to recreate ComEd’s CARES programs which are just glorified PR programs for them. These programs were ended by the GA in favor of LIHEAP and the new Percentage of Income Payment Program. Opponents did ask for it.
SB1652 & HB3036 were never negotiated by anyone except for ComEd. ComEd was the only ones who know what was in the “Trailer” bill HB3036 before it was on ILGa. Everyone else only got to see it an hour before it was voted on in Committee.
How is voting for electric rate hikes standing up to AARP?
No one was opposed to updating our infrastructure, the issue is no we need to guarantee ComEd & Ameren profits in state law for the next decade, and make consumers pay billions for non-electric items as: executive bonuses, charitable donations, and legal fees???
Soccermom - targeting 10% ROE is actually on the low side of the nationwide range 10-10.5% over the last 5 years across the country (all PUC-IOU relationships), which is actually down from the 12.5% it was in 2000-2001. The trailer bill sets the rate, as of today, nearer to 9%, so even more conservative. If you wonder “why is any return guaranteed or set”, this is the nature of the PUC(ICC) relationship to IOU’s. In all rate cases there is a ROE number. That number is also tied to regulatory lag, which in this state can take up to 11-12 months, and it increases the utilities borrowing costs - because they have to borrow the money to make the improvements before going through the process of recovering it, outside of some forecasted construction costs. They do have to build the grid before you see the improvements, but frankly, there is absolutely no way you and those around you will not notice a difference in outage duration (time to restore). You will just have to struggle to remember how frustrated, or worse, how much it cost you with groceries or your private business sales, in years past when a storm knocked the power out for multiple days and not just hours.
Suz - its still an issue of setting a ROE into state law for monopoly utilities or any private company. Then there’s the issue of risk - less risk should mean a lower ROE. SB1652/HB3036 takes away all the risk.
Shoz - You are right on, less risk should mean lower ROE. I don’t know, but I would guess that is in part the reason for agreeing to an ROE lower than the 10-10.5% avg.. Regarding the use of the formula rate process, FERC has overseen this model on the Transmission side of the business for years and, while they use a higher ROE on that side, my point is that the formula rate process is not a foreign one and if you look at Transmission side customers, most would speak highly of the technology investment into the service they receive. It just works and FERC acts as the oversight in establishing prudent and reasonable expense, just like the ICC will still do on an annual basis now.
===the current lack of reliability CANNOT be your argument for lack of improvement. ===
Yes, but the current lack of reliability is probably the best indicator of how the utility companies will do in getting the job done. Not to mention how their self designed regulatory structure will work.
All kidding aside, it doesn’t take a genius to know how effective regulatory agencies are that are this easily bypassed. And if you think that going through the legislative process is just as impartial a review; imagine how most people (or legislators themselves) would react if the same kind of money was given to members of the ICC during a rate case.
==so, anyone tally up the ratio of com ed & ameren lobbyists to legislators? Is it really
1:1? I’m pretty sure it’s close==
someone else may know better how to find the answer, but from http://www.ilsos.gov/lobbyistsearch/lobbyistsearch, I count 25 lobbyists for ComEd, 28 for Ameren, and 4 for Ameren Energy Resources. I only saw a little bit of overlap with with lobbyists listed for more than one, so it might be 50, but figure people have different roles and not all are 100% full-time lobbyists.
Sorta funny that AARP of all groups complain about how powerful another lobby is.
I don’t follow the more jobs argument. With better technology to understand where outages are, wouldn’t that technology allows ComEd to cut staff, since they don’t need to pay so many people to figure out where the outage is.
I frankly don’t care what their profit is set at. Even if it was 2% i would be opposed. Because the calculation is planted in law and does not take into account bond ratings, outstanding debt load, and a myriad of other factors that you have to consider when you calibrate a regulated monopoly’s return.
In 1652 its Tbills X basis points. That’s it. And by the way, the average difference between utility profit margins and treasury rates across the nation was 540 basis points. Its 580 basis points in 1652/3036.
@robert u bring up two very valid points. lobbyists influence legislation that affects us all. big organizations would do well to have them as a result. why do some members of these organizations not realize the necessity of these lobbyists? how unrealistic is their concept of govt? i guarantee aarp has some lobbyists as well, but when ur on the losing side…
comed will transition employees to other areas of the company but some jobs will be rendered useless by tech advances. should we not move forward with these advances to keep people working?
Is mushrooms even the right term for the members of the GA any more?
They don’t vote against the public’s interest because the leadership feeds them B.S. They vote against the public’s interest because the leadership feeds them corporate cash.
And they don’t have the decency of waiting to cast these sort of votes at midnight with the members kept in the dark. Instead they have the audacity to cast these votes openly and brazenly in the light of day fully aware of their own pay for play.
“The General Assembly just sent a clear message to their constituents: Corporate interests and campaign cash trump the needs of Illinois consumers.” Is a cop out statement. Take “…interests and campaign cash trump the needs of…” and those words can be applied to every single piece of voting every day, in every single session. It is a waste of words. Every vote that is cast makes some company or individual that at some point has contributed to that legislator happy…..but nobody says anything about the contributors to the politician that aren’t happy. If you see the coffers of these politicians they are donated to by individuals and companies that have many varying interests and are often in conflict, so it takes no thought whatesoever to say “…XXX interests and campaign cash trump the needs of XXX…” The only way to eliminate such an ignorant statement is to do away with campaign contributions and that will only lead the way to more corruption and a guaranteed class structure as most likely only the wealthiest would win the majority of the elections…so that clearly isn’t the answer. If you say reform - sure, but you will always have many different contributors with varying interests.
I threw in the towel this summer and installed an automatic whole house generator because I am so sick of the outages. Now with Rahm doubling my water rates I guess I will dig my own well. ComEd won’t fix anything except heir bottom line.
I threw in the towel this summer and installed an automatic whole house generator because I am so sick of the outages. Now with Rahm doubling my water rates I guess I will dig my own well. ComEd won’t fix anything except their bottom line.
Suz I think it’s not a waste of words when most people find the donations very troubling. In many cases those people will make decisions on who to vote for or not vote for based on those considerations. Yes the system is much more complicated than simply one sentence but every time you make a statement does not require a civics lesson and a history of the political process.
And yes other groups have lobbyists, like AARP or supporters of Tenaska, so I think it makes sense to point out the difference in outcomes for the group that has lobbyists and can donate more. For voters it is extremely important to see whether your representatives are prioritizing your vote or campaign cash.
Cook county commoner raises an interesting point re: the friends and family of legislators and Exelon stock. Do Illinois disclosure laws require members of the G.A. to report when they own over a certain percentage of a particular stock? Seems like the public has a right to know. And if a member or immediate family member stands to benefit from the passage a bill which will boost the stock’s value…shouldn’t the legislator not be allowed to vote on the bill? Or, at a minimum, have to disclose this information? But maybe all of this disclosure/etc. already exists. Just seems that if campaign contributions are required to be disclosed, so should other information.
and of course Quinn’s pick for the Illinois Power Authority might want to disclose how this affects the gobs of Exelon stock she has. Perhaps Quinn would just make her donate any gains to his campaign.
Dave V - I don’t think I described it well. It is a waste because it can be said any time there is a vote one way or another. It is meaningless. If I donate $50 to a campaign and Debbie who sees things differently donates $50 to the same campaign. Each time there is a vote - if I like the vote, Debbie can say ” Suz’s interests and campaign cash trump the needs of Debbie’s neighborhood” and if it goes the other way vice versa. Big deal. If you can say the same words every time something happens, it sure doesn’t seem to carry any value. Someone is happy and someone that contributed to the exact same candidate is not, every time there is a vote.
Just askin’ - very interesting point. I recall back to Tom Ridge, who used to head up Homeland Security, and acted/still acts as an Energy consultant, and he had/has an enormous vested interest in Exelon, while maintaining incredible political influence. When it comes to any public official knowing their financial position with a company they are voting on seems somewhat reasonable. It certainly can turn into a slippery slope of coincidence and degrees of association. For example, a lot of people own GE stock and GE is involved in so many different industries that a lot of legislation can have an impact on their business, so who decides when a level of investment is relavant, possibly self serving, or just being an old school blue-chipper who loves to buy GE stock. Very interesting topic though and valid point.
I am please Democratic Senator Mike Jacobs won this battle. A man of less character would have folded his tent. Not Big Mike Jacobs, he took his licks and kept on ticking. One day the self-appointed political elite is going to have to give this fast rising political leader his due.