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Comed pays up, but watchdogs ain’t happy

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Illinois

* Yesterday…

ComEd today issued the following statement on behalf of CEO Gil Quiniones after the Illinois Commerce Commission (ICC) approved the company’s voluntary customer refund:

“Today’s approval of ComEd’s voluntary $38 million customer refund resolves any question of whether customer funds were used in connection with the unacceptable conduct detailed in the July 2020 deferred prosecution agreement (DPA).

The quality and value of ComEd’s service to our customers is arguably the best in the nation, but we recognize that delivering excellent performance and value for the dollar is not enough and we are equally dedicated to earning and maintaining our customers’ trust. We’re committed to maintaining high standards of ethical behavior for our business, our leaders and every employee, and we continue to build on the significant new policies, oversight and rigorous employee training that we’ve enacted since 2020 to make sure that the past conduct that drove this refund can never happen again.”

* Tribune…

Commonwealth Edison customers are in line for a roughly $38 million refund — or about, on average, a little less than $5 per residential customer — to address what the utility giant acknowledged was its “unacceptable conduct” in the bribery-related scandal that has swept across Illinois and helped end Michael Madigan’s historic run as the Illinois House speaker.

The Illinois Commerce Commission on Tuesday approved the refund plan on a 3-0 vote, with the ICC’s chairwoman abstaining from the vote because her father-in-law has been embroiled in the scandal.

The $38 million refund was an amount ComEd offered after a previous $21 million proposal in December drew criticism for being too small. […]

The ICC order is designed to resolve two investigations — one the ICC initiated and one required by a sweeping energy law approved last year — that called for examining whether ComEd improperly charged ratepayers costs tied to the Madigan scandal.

The customer refund follows ComEd’s separately negotiated $200 million federal fine that was part of the deal with U.S. Attorney John Lausch that disrupted Madigan’s political career and roiled Illinois politics.

* Crain’s…

Commissioners determined that ComEd’s deferred-prosecution agreement with the U.S. attorney’s office in Chicago allowed for the $200 million equity infusion and so it shouldn’t be included.

ICC Chair Carrie Zalewski recused herself because her father-in-law, former Ald. Michael Zalewski, was among Madigan’s closest allies whom ComEd put on its lobbying payroll in return for little or no work. The vote was 3-0.

“The item before us is the result of Commonwealth Edison’s unacceptable actions to influence legislators and legislation from 2011 to 2019. Under (the 2021 Climate & Equitable Jobs Act) and this docket, the commission has narrow authority to review ComEd’s actions,” ICC Commissioner Ann McCabe said from the bench. “The scope includes whether ratepayer funds were used to pay the $200 million criminal penalty—no—and whether ratepayer funds were expended in connection with the conduct detailed in the DPA.”

* Press release from Illinois PIRG…

The Illinois Commerce Commission approved on Wednesday a $31 million rebate for ComEd customers for costs directly associated with the utility’s bribery scheme. ComEd customers will receive an additional $7 million rebate through a federal regulatory process, for a total $38 million refund.

The Commission investigation was dictated by the Climate and Equitable Jobs Act. The law gave the investigation a narrow scope: to only consider costs ComEd customers paid directly attributable to ComEd’s execution of the scheme, not to the significantly higher rates customers paid and profits ComEd reaped because of legislation, such as the 2011 “formula rate” law, passed over the course of the scheme.

The Commission rejected an argument made by the Illinois Attorney General, City of Chicago and Citizens Utility Board that would have refunded customers an additional $7 million. Those parties argued that ComEd boosted its profit rate through the manner the utility paid its $200 million fine to the federal government through its deferred prosecution agreement.

You can read Illinois PIRG’s report on the 2011 Energy Infrastructure Modernization Act here.

In response, Illinois PIRG Education Fund Director Abe Scarr released the following statement:

“While $38 million is welcome relief for ComEd customers, it’s chump change compared to the more than $6 billion in additional revenue ComEd has earned since the outset of its bribery scheme.

“Not only have policy makers failed to hold ComEd accountable, they rewarded ComEd with a new rate structure maintaining key ‘formula rate’ profit guarantee policies that could be even more profitable for the utility

“ComEd customers should prepare for big rate hikes that will dwarf this less than $5 refund for the average customer.

“ComEd even found a way to boost its profits by paying its fine. It’s hard to imagine a better symbol of the failure of Illinois policymakers to hold ComEd accountable.”

* CUB…

We are disappointed in today’s Illinois Commerce Commission (ICC) ruling, and we plan to file a petition for rehearing. A $36 million refund falls short of the refund recommended by CUB, the Illinois Attorney General’s Office and the City of Chicago. Further, this case was limited to direct costs and only partially compensates customers for ComEd’s misconduct—people deserve better in the wake of Illinois’ most significant utility scandal ever. CUB continues to work on behalf of consumers for full restitution, as well as the most pro-consumer implementation of the Climate & Equitable Jobs Act (CEJA) to protect customers from unjustified rate increases.

Background:

• On August 17, the Illinois Commerce Commission (ICC) voted 3-0 to order ComEd to give its customers a $31,296,338 refund in connection with the company’s bribery scandal that erupted two years before. The refund, about a $4.80 bill credit on average, will be delivered to customers on their April 2023 bills. [Another $5,019,312, plus interest, will be added to the refund, upon Federal Energy Regulatory Commission (FERC) approval, making the total refund at least $36.3 million.]

• In July 2020, ComEd was fined $200 million by federal authorities, after admitting to a bribery scheme to pass legislation in 2011 that implemented a “formula rate” system. That rate-setting system left electric customers vulnerable to hundreds of millions of dollars in rate hikes over the last decade. (Note: In 2013, ComEd went back to the General Assembly to adjust the formula rate because the utility did not approve of how the ICC was interpreting the law. CUB opposed the 2013 bill for the same reasons it opposed the 2011 law.)

• In October of 2020, in a federal lawsuit, CUB alleged ComEd enriched itself “at the expense of Illinois utility customers.” The consumer watchdog joined a similar state class action.

• In September 2021, a judge dismissed the federal class action lawsuit. In December 2021, a judge threw out the state lawsuit.

• The Climate & Equitable Jobs Act (CEJA), which passed in September of 2021, will replace the unfair formula rate system. CEJA also called for an ICC investigation into a refund. During this investigation, which the ICC ruled on Wednesday, CUB, the Illinois Attorney General’s Office and the City of Chicago argued for a $45 million refund for ComEd customers. The ICC probe was narrow in scope, only focusing on direct costs—not damage done to consumers by paying higher electric rates.

posted by Rich Miller
Thursday, Aug 18, 22 @ 10:16 am

Comments

$5 bucks?. Wow. Easy street here I come.

Comment by PublicServant Thursday, Aug 18, 22 @ 10:22 am
pittance
grift netted more profit than the fine

Comment by halving_fun Thursday, Aug 18, 22 @ 10:30 am
I think it actually was a $4.80 credit.
I think we should all be thankful to non conflicted Commissioners on Pritzer’s Illinois ComEd Commission for standing up for the ratepayers and delivering this distribution credit. Trusting this will teach those ComEd folks (both indicted and not yet indicted) a lesson that JBP is in the corner of us non-insiders. S/

Comment by Back to the Future Thursday, Aug 18, 22 @ 10:32 am
They should see what Com Ed paid for lobbying and what salary they paid Madigan employees and their legal fees over the past 25 years and triple that and add that to the fine

Comment by DuPage Saint Thursday, Aug 18, 22 @ 11:12 am
Isn’t there some aphorism along the lines of: “a crime that only has fines, and no jail time, means it’s only really a ‘crime’ for poor people.” ? Or something like that. Com Ed is doing just fine. So are many corporations that do things like pollute and pay fines rather than spend the greater amount of money to produce without polluting. Oh wait; I guess I’m still talking about Com Ed.

Comment by Give us Barabbas Thursday, Aug 18, 22 @ 2:26 pm
This is beyond insulting to the taxpayer, and demonstrates that little has changed in the treatment of ComEd by the State. This hurts…

Comment by Lincoln Lad Thursday, Aug 18, 22 @ 5:18 pm