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* I’m hearing the electric utility rate relief negotiations produced about a billion dollars over four years with people getting actual refund checks. Some sort of Illinois Power Authority language, which would allow the state to build power plants, is also close to fruition, but could turn out to be a snag…
After meeting privately for about three hours Thursday to discuss Illinois’ problem with soaring electricity rates, top utility company executives and Democratic legislative leaders said little other than that they made “substantial progress.”
The sketchy description nonetheless caused some lawmakers and others who have closely monitored the electricity issue to express guarded optimism that a resolution is just around the corner.
* Officially, all anyone would say yesterday is this…
“We made substantial progress,” said House Speaker Michael Madigan, D-Chicago.
“Substantial progress has been made, and we’re encouraged by that,” Ameren Illinois President Scott Cisel said.
“We made substantial progress to get the issues resolved,” said Senate President Emil Jones, D-Chicago.
That sentiment has been uttered for months as lawmakers work to convince the utilities to compensate Ameren and ComEd customers to make up for the power rate hikes that began Jan. 1.
“I look for negotiations to keep on going,” state Sen. Gary Forby, D-Benton, said March 30. “I am all for them.”
* Crain’s…
Neither Mr. Madigan nor Mr. Jones would elaborate much, but sources close to the matter said the utilities offered about $1 billion in rate relief, twice as much as had been on the table previously.
Some of that money reportedly would come from Exelon, and some from ComEd, its wholly owned Chicago-area subsidiary.
Talks to finalize the deal may continue later Thursday, sources said.
The lack of a deal has been a key factor in preventing lawmakers from concentrating on a second series of disputes over a fiscal 2008 state budget. If the utility matter indeed is completed, odds will increase of a deal on the budget deal, too.
posted by Rich Miller
Friday, Jun 15, 07 @ 9:36 am
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I just got off the phone with my Electric Company. I ask if I could make my check out in the amount of “Substantial Progress” and mail it in to satisfy my balance. They laughed at me rudely and hung up!
Comment by A Citizen Friday, Jun 15, 07 @ 9:58 am
The fact that it is twice as much as previously “on the table” is meaningless since we apparently don’t know (or are not willing to say)
how much the companies could afford to pay to prevent a rate cap. We do know that they want to make as high a profit as possible, though, so we imagine their estimates have a subjective cast. We certainly don’t want to let profit-driven execs drive the anchor numbers here (the ones from which a final offer will be derived)…but it looks like we are doing just that.
And the fact that “actual rebate checks” are in the offing is also meaningless, given that we don’t know how much the checks would be, the criteria for disbursement, and so on. One rebate check? One a year for four years? Etc. Out of 250 mil a year (or one bil over four years) that’s not much, especially since we don’t know if the rates will be adjusted downward as part of the deal.
Is a capable forensic accountant reviewing the
utility companies’ figures on behalf of the consumers of Illinois? Does he/she agree that 1 billion or whatever is the best they can do and remain reasonably profitable? I’d like to believe that the individuals representing the taxpayers and the consumers in these discussions are capable of getting the best possible deal, but I am not optimistic.
This is where we need a governor who is, well, a little smarter….
Comment by Cassandra Friday, Jun 15, 07 @ 9:58 am
Is “substantial progress” code for nothing sigifiant was accomplished?
Comment by Patriot Friday, Jun 15, 07 @ 9:59 am
I meant “significant.”
Comment by Patriot Friday, Jun 15, 07 @ 10:00 am
Time is on Madigan’s side.
If the utilities take any more time, they will be forced into a new bargaining environment that will kill them further. This will be caused by the new electrical bills coming in for summer air conditioning.
Madigan has passed his budget, and has passed his rate relief. The longer Jones and Blagojevich wait around, the worst their situation becomes, and with them, the utility companies’ predicaments.
Blagojevich has been talking the talk about rate relief with no action. He does it because it is good politics. He knows Jones would prevent rate relief and allow him to continue blathering about working for us little people. Perhaps Blagojevich is further in debt to Ameren and ComEd more than we realize. His inaction is very curious, isn’t it?
Comment by VanillaMan Friday, Jun 15, 07 @ 10:04 am
Patriot: I’m hearing the exact opposite, that they’ve agreed on a number and that the sticking point now is how to set electric rates in the future. So basically what Rich said.
I’ve also heard that some of the money will be in checks, and some will be in lowered rates for the next while.
Comment by So Ill Friday, Jun 15, 07 @ 10:54 am
So Ill: I hope you are correct.
Comment by Patriot Friday, Jun 15, 07 @ 10:59 am
A couple of points: It is very frustrating to have energy policy dictated without those affected having a say. An IL power authority? You don’t have to look past the Springfield power authority, and its dances with bankruptcy to understand why such a solution only adds to the problem. Long Island Power Authority, for example, is a mess and charges rates close to 3 times what Ameren customers pay. Energy policy is complex, and I fear the resulting solution, that will affect citizens for the next 10 years, will be jammed down our throats, without input from parties that have the ability to enhance decisions.
Comment by electric boogaloo Friday, Jun 15, 07 @ 3:34 pm
EB, your points about Springfield’s power authority may be misplaced. We have the lowest electric rates in the state and serious local control.
Comment by Rich Miller Friday, Jun 15, 07 @ 3:37 pm
Rich, I was thinking back to the capacity crisis around 1998 while I was typing, where Springfield was caught short.
Comment by electric boogaloo Friday, Jun 15, 07 @ 3:42 pm
I hope the deal is more than just handing out checks. The way the electric rates are set for residential consumers needs to be fixed. I hope CUB and other consumer groups are involved in the deal-making process. I don’t trust Sen. Jones and the Senate Democrats to look after our interests.
Comment by fedup downstate dem Friday, Jun 15, 07 @ 4:41 pm