UPDATE: ComEd’s Legislative Support Evaporates
Legislators demand accountability from utility.
Dissatisfaction with answers from ComEd at a hearing of the Illinois House Public Utilities Committee Tuesday in Highland Park is causing members of the General Assembly to rethink their support for legislation favored by ComEd.
State Rep. Karen May (D-Highland Park) arranged the meeting in the northern suburbs after more than 1.2 million ComEd customers were left without power in the aftermath of storms June 21 and July 11.
Twelve members or substitute members of the committee heard ComEd President and Chief Operating Officer Ann Pramaggiore tell a gathering of more than 200 people at the Highland Park Country Club the company was prepared to make changes.
Pramaggiore also said smart grid legislation passed by the legislature and now under a veto threat by Gov. Patrick Quinn will go a long way toward solving many of the problems that kept citizens without power for days this summer.
“It would have reduced outages 15 to 20 percent (after the July 11 storm),” Pramaggiore said. “It would have relieved pressure on the restoration process.”
Committee members who both supported and opposed the legislation want it strengthened before it becomes law. May voted in favor of the bill but now wants Quinn to either veto the bill or return it to the legislature.
“We need stronger performance metrics to hold ComEd accountable,” May said. “The bill also needs overall transparency to the improvement of the infrastructure. The citizens deserve that.”
Of the people sitting on the Committee, May and state Rep. Robyn Gable (D-Evanston) voted for the bill while state Rep. Daniel Biss (D-Evanston), state Rep. Elaine Nekritz (D-Northbrook) and state Rep. Sid Mathias (R-Buffalo Grove) opposed it. All want changes to force better performance.
More oversight, less returns
Biss wants to start by severely limiting the potential return ComEd can achieve on its 10-year investment to improve reliability and storm restoration. The company will also install meters which automatically let it know if a customer is out of power.
“Their return on equity is tied to treasuries which are at a historic low,” Biss said. “Any reasonable economist will tell you treasuries are going to go up.”
According to Bankrate.com, most U.S. Treasury yields are hovering below one percent.
This structure will give ComEd a potentially high return in even a mild economic recovery according to Biss.
“If rates don’t go up it will be very bad for our economy,” he said. “We can’t sustain these low rates.”
Before Nekritz can support the bill, she wants to see more oversight by the Illinois Commerce Commission (ICC). The ICC regulates ComEd. While giving the utility performance standards, the law reduces the ICC’s ability to regulate.
“The bill eviscerates the ability of the ICC to oversee ComEd,” Nekritz said. “They (ComEd) have to be subject to external pressure.”
As currently written, the smart grid legislation reduces ICC regulation and adds performance standards ComEd must meet regarding reliability and performance. According to Pramaggiore that amount is in excess of $20 million a year.
“That’s nothing for a company that earns billions,” Biss said. “It has to be painful to force performance,” he added about penalties.
Concerns about profits
Pramaggiore considers the standards imposed by the proposed bill unusual and more than adequate. She considers it a major concession made by her company to members of the legislature.
“You don’t see this model anywhere else in the United States. There are performance metrics we have to live up to,” Pramaggiore said. “This is a good model and we stand by it."
When Biss asked Pramaggiore her company’s current profit, she said she did not know.
Gable originally voted for the bill, but now looks forward to the governor to return it to the legislature with changes. She wants the bill reworked to include greater control of ComEd and metrics to better assure reliability than the current ones.
“I’m a little concerned about the profits,” Gable said. “We must make sure the reliability is upheld and the commission (the ICC) must be equipped to impose regulations.”
Like Nekritz, Mathias wants to see regulatory power increased rather than diminished. “There must be more oversight by the ICC rather than less,” he said. “At too many levels ComEd doesn’t communicate with our citizens.”
Willmette Village President Chris Canning asked the committee members to rescind the legislation and replace it with a law making ComEd more accountable. He was speaking both for his community and the Northwest Municipal Conference which he chairs.
“We need an inquiry that is driven by data,” Canning said. “If we don’t do something now we’re going to have another meeting 10 years from now.”
City officials chime in
A number of municipal officials testified about the difficulties their communities faced because of the outages after the June 21 and July 11 storms. Long time Highland Park City Manager Dave Limardi has seen these problems for more than 30 years.
“I’ve been dealing with ComEd since 1977 and the issues are the same now as they were then,” Limardi said. He also complained city staff must handle complaints the utility fails to resolve. “My staff shouldn’t be doing ComEd’s work. They should be doing the work of the people of Highland Park.”
Glenview Village Manager Todd Hileman echoed Limardi’s complaints. He claimed if he ran his village and treated its citizens the way ComEd operates its business and deals with its customers he would be fired.
“I am asking the members of the Public Utility Commission to withhold any support for the smart grid system subject to meaningful improvements being negotiated in the areas of customer service, technology and transparency of capital investment,” Hileman said.
May also wants to see ComEd immediately improve poorly performing circuits which have been identified rather than wait for a complete plan.