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* As I told subscribers this morning, Ameren Illinois CEO Scott Cisel waved the white flag yesterday in an op-ed he penned for a few downstate newspapers.
The 1997 de-regulation law and resulting competitive model has not worked as intended - especially for Illinois’ downstate residential and small to medium sized non-residential customers. […]
[Cisel said he was willing to do several things, including] Modifying or replacing the current auction power procurement process. […]
Returning to a fully regulated model for residential and small to medium sized non-residential customers, that is known and proven, may provide greater price stability and long-term certainty of electric supply, while still giving large users the option of alternative suppliers. It also creates an opportunity for utilities to invest in new generation, creating jobs and growing our downstate economy.
Um, wow.
Still, as others pointed out, Cisel offered no immediate rate relief, and the General Assembly will likely force some before it’s over.
“If it doesn’t include a refund of the rates that were wrongly charged, it falls short of a solution,” said state Rep. Dan Beiser, D-Alton, who favors the three-year freeze on rates set by Ameren and Commonwealth Edison that the Illinois House approved two weeks ago.
Beiser, however, called the idea of returning to re-regulation “a very good concept to explore.” […]
David Kolata, the executive director of the nonprofit Citizens Utility Board, also slammed Cisel’s proposal for not offering refunds. As for re-regulation, Kolata called it “something that could work, but it has to be done in the right way.”
Interesting times.
* And if all Ameren’s bad publicity wasn’t enough, there’s this…
Ameren Corp. didn’t meet its own profit goals last year and sustained two power outages that left more than 1.5 million customers without electricity for days at a time.
But top executives still pulled down $762,000 in cash performance bonuses.
The St. Louis Post-Dispatch reported Friday that Ameren’s board of directors shuffled the numbers so that top executives could get the bonuses, even though they were not initially entitled to them under the company’s compensation plan.
* Meanwhile, the Peoria Journal-Star goes way over the top in a juvenile attack on Pat Quinn…
THUMBS DOWN! To Illinois Lt. Gov. Pat Quinn, for mistaking populism for leadership. Quinn’s latest targets have been electric utilities and the Illinois Commerce Commission, which of course are Satan (never mind that the latter’s members are appointed by his boss, Gov. Rod Blagojevich, which must make him Satan’s apprentice).
Let’s see, has Quinn called on Blagojevich to act on the issue? Check.
Has the attorney general found evidence to claim that power companies colluded to force through higher rates? Check.
Has a large segment of Ameren’s customer base suffered miserably as a result of the rate hikes? Check.
Has Quinn ever called Ameren or ComEd “Satan”? Nope.
Conclusion: The PJ-Star had better never criticize bloggers for being “uncivil” if they’re gonna publish ridiculous editorials like that.
posted by Rich Miller
Monday, Mar 19, 07 @ 8:39 am
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Why do you call it a white flag? Under a regulated monopoly they are guaranteed a profit. He’s just rent seeking. By scrapping a deregulation your just giving them what they wanted, protection.
Examine the barriers of entry for potential competitors. Elimenate them and make the utilities actually compete.
Comment by Greg Monday, Mar 19, 07 @ 8:50 am
Isn’t any idea offered by Ameren a good one to run away from?
Comment by No fan of Satan Monday, Mar 19, 07 @ 8:51 am
I could comment on your ‘juvenile attack’ on THEIR ‘juvenile attack’ about the gadfly Lt. Gov., but that would be juvenile wouldn’t it. Quinn used to be OK with his independence until he HAD to support Hairdo getting elected again.
Comment by ole timer Monday, Mar 19, 07 @ 8:52 am
Perhaps Scott Cisel’s comments would be a little more believable if he were to give back his bonus. In this time of people struggling to pay their electric bills, some small business perhaps going out of business, would it not be a great good faith showing for all of Ameren execs to decline their bonuses, at least for this year? The last I knew, salaried people are expected to work whatever time it takes to get the job done. It’s incomprehensible that these managers and execs were given bonuses for what they are already paid to do. Sure the union people got double time for their work - AND THEY SHOULD HAVE. I wouldn’t have wanted to be out in the ice and snow climbing unstable power poles with icy limbs hanging over my head while attempting to reconnect electric power. These union people more than earn that double time. Show me a manager who is able to do the same as a lineman and perhaps I will rethink their bonus. Until then, hand those bonuses back boys/girls.
Comment by Little Egypt Monday, Mar 19, 07 @ 9:01 am
Greg, the distributors are all but guaranteed a profit anyway. They’re worried that a rate freeze would take those profits away.
Comment by Rich Miller Monday, Mar 19, 07 @ 9:06 am
“ole timer” how in any way was my “attack” on the pj-s “juvenile”?
Comment by Rich Miller Monday, Mar 19, 07 @ 9:07 am
Looks like it is one down and one to go
If the Ameren’s Juice Man is caving, then Exelon/ComEd Sparky Clark cannot be far behind.
Senators will be lining up to vote a statewide rate freeze return. And if they drop the ball they will get a chance to concur in the House amendment
Comment by GettingJonesed Monday, Mar 19, 07 @ 9:17 am
If Ameren’s Board wants to doctor the numbers to give out those bonuses, they deserve the wonderful PR they are getting. Ameren is monopoly. Seems they have pretty well the last several years, but are now insisting on shooting their own feet as they stuff them in their mouths. Madigans report does not help. They could come out of this by offering some generous refunds, voluntary adjustments, and system upgrades as they work with the GA on long term answers. But no, doctor the numbers and take the bonus. Brilliant! Idiots. They deserve whats coming.
Comment by zatoichi Monday, Mar 19, 07 @ 9:22 am
Forgot to mention PJS is totally in Ameren’s tank. They like to pretend the legislature created the power problem.
I think some staffers think The Juice Man is nearly as dreamee as the most incredibly dreamee-ist state rep in America.
Comment by GettingJonesed Monday, Mar 19, 07 @ 9:22 am
One minor point about Cisel’s suggestion…Ameren doesn’t generate power, which is where regulation takes place. Ameren would just seel the power at whatever price the Commission approves. Ameren loses nothing in the process. The generation companies are on the hook for this one.
Comment by Commonsense in Illinois Monday, Mar 19, 07 @ 9:34 am
Commonsense, the generators are, for the most part, deregulated. The regulated entitites are the distributors.
Comment by Rich Miller Monday, Mar 19, 07 @ 9:37 am
If Cissel couldn’t control his own flying monkeys in their greed for wealth, how could we expect him to enforce anything he says?
Until he starts bagging the monsters roaming the halls at Ameren, I’m not impressed.
Comment by VanillaMan Monday, Mar 19, 07 @ 9:37 am
Rich,
Sweeten the pot for new market entrants, that will make all the difference in the world.
Are you assuming that the rate freeze would be the same as it was and there would be no way for Ameren to seek a higher cap to keep them from going bankrupt in future? And the ICC or legislature wouldn’t eventually give them a hike and make sure they don’t receive a small profit?
The reality is that Ameren can’t operate at a permanent loss in Illinois. Eventually, prices will have to go up to reflect higher costs for power. Regulation will give them a small profit and protect that small profit from competition.
Comment by Greg Monday, Mar 19, 07 @ 10:00 am
Does all this matter? Emil holds the switch. If he does nothing, then things will stay the way it is.
Comment by He Makes Ryan look like a saint Monday, Mar 19, 07 @ 10:40 am
I’ve watching the Illinois Channel’s broadcast of the Committee of the Whole hearing at which time Mr. Cisel sat in front of the Speaker’s stand. Mr. Cisel looked very uncomfortable and was sweating profusely. To me, that shows Ameren had no plan other than to continue their rate hike policy and keep their high corporate payouts at freezetime levels. Ameren has gotten away with murder for a long time, and even during the rate hike they weren’t as pro-consumer as they want to paint themselves to be.
Comment by Team Sleep Monday, Mar 19, 07 @ 10:41 am
What was the evidence? The FERC may be interested in seeing it since they have jusrisdiction over these issues.
“Has the attorney general found evidence to claim that power companies colluded to force through higher rates? Check.”
Comment by Anonymous Monday, Mar 19, 07 @ 11:13 am
ANON 11:13
The AG documents the kinky deals — which most expected. Consumers are Getting Jonesed — Again.
FERC does not do much to their utilities bosses
Comment by GettingJonesed Monday, Mar 19, 07 @ 1:20 pm
I’m sure the feds would like to see the “kinky deals” or maybe better yet - this is just a bunch of sand kicked up for political cover by a daughter for her dad. Gee - that would never happen in Illinois politics!
Comment by Anonymous Monday, Mar 19, 07 @ 3:52 pm
I’ve said it before - unless these corporate “kings” have the cure for cancer, they are not worth 1/10th of $750,000+. They equate coming in at 10 a.m., 2 or 3 hour lunches, meetings, smoozing and going safely home at 5 p.m. as work. Everyone except a few innocents knows that corporate America pays these CEOs for who they know, not what they know or do.
Smoozing is more valuable that innovation, planning and effort. And remember that the Ameren upper echelons kept mum about their salaries and bonuses until the media ferretted it out for all to see. If these guys had to really work, they’d be in traction in a week.
Comment by Disgusted Monday, Mar 19, 07 @ 7:12 pm
SCOTT CISEL’s New Offer…Give customers credits for the bills paid and let us pay the increases over a 3 year period with no interest. BIG DEAL! We would rather take our chances and let the ICC and FERC complete their investigations.
Comment by Lied to Monday, Mar 19, 07 @ 9:05 pm