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ICC staff, transit agencies, business groups, CUB gang up on ComEd’s $1.5 billion rate hike request

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Illinois

Commonwealth Edison today is filing with state regulators to hike its delivery rates by $1.5 billion over four years, beginning in 2024.

The multiyear rate plan, authorized under the landmark Climate & Equitable Jobs Act, would boost ComEd’s distribution revenue by nearly 50% over that period if approved as submitted, according to a Securities & Exchange Commission filing this morning by ComEd parent Exelon. […]

Much of the eye-popping increase can be explained by a spike in the return on equity ComEd is requesting—essentially its profit level. ComEd’s requested ROE for 2024 is 10.5%. Its returns on the most recent rate hike—nearly $200 million, the last such increase under the old formula law—were less than 8%.

* Yesterday…

Consumer advocates and staff of the Illinois Commerce Commission today urged the regulator to dramatically reduce Commonwealth Edison’s $1.5 billion rate hike over the next four years.

The Citizens Utility Board in testimony filed with the ICC recommended cutting that amount by 60% to $585 million.

Illinois Attorney General Kwame Raoul’s office recommended a more modest reduction, to $1.1 billion. But CUB Executive Director David Kolata in a statement said he expected his group and the AG to combine forces to push to reduce that $1.5 billion request by more than $1 billion in coming months.

In addition, ICC staff — in the past typically less critical of utility rate recommendations than CUB or the AG — urged that commissioners sharply reduce ComEd’s equity return embedded in its rate proposal to 8.91% from a utility-proposed rate starting at 10.5% in 2024 and climbing 0.05% each year to end at 10.65% in 2027. […]

A host of other business and municipal parties filed testimony on ComEd’s proposal, showing how much is at stake for the region. They included the Chicago Transit Authority, Metra, the city of Chicago, the Building Owners & Managers Association of Chicago and Walmart.

* And…

The proposed rate hike is also projected to increase the profit rate for ComEd shareholders to 10.5% in 2024, growing to 10.65% in 2027. In its filing, CUB argued for “a more reasonable” 9.4% return on investment, which would reduce the rate hike by $570.4 million.

In addition, CUB challenged ComEd’s forecast for residential usage as “unrealistically low,” with the utility overstating its revenue requirements in the proposed rate increase by an additional $194.7 million.

“We’re still analyzing CUB’s testimony, but based on an early review, we disagree with CUB’s assessment of our multiyear plans,” ComEd spokesperson Paul Elsberg said in an email. “Our proposed investments provide meaningful benefits to our customers and communities and support the goals of the state’s Climate and Equitable Jobs Act, and we look forward to working with the Commission and all participants in the proceeding to prove that out.” […]

CUB also cited the bribery lobbying scandal that resulted in the conviction of the “ComEd Four” earlier this month as leading to $1 billion in rate hikes over the last decade.

posted by Rich Miller
Wednesday, May 24, 23 @ 12:18 pm

Comments

ComEd has a lot of chutzpah. And you know it’s really bad if even CUB is willing to bash their ask. Typically, and as the trial revealed in some of the exhibits, CUB has been less than vigilant on ComEd and aggressive on everyone else. So you know this ComEd demand is really excessive.

Comment by New Day Wednesday, May 24, 23 @ 1:05 pm
It’s common knowledge that utilities always ask for more than they expect to get in a rate case, but even with that in mind, $1.5B is really, really excessive. ComEd has no shame.

Comment by Nobody Sent Wednesday, May 24, 23 @ 3:58 pm
8.91%, 9.4%, 10.5%? All of those numbers are unconscionably high.

Comment by Odysseus Wednesday, May 24, 23 @ 5:20 pm