UPDATE: ComEd’s Legislative Support Evaporates
Legislators demand accountability from utility.
Photos
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.
Earlier: ComEd Can't Pull Plug on Residents' Anger
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.
John Temmerman
7:38 pm on Tuesday, August 16, 2011
there are a lot of public officials objecting to comed's incompetence but I don't see anyone from the Village of Skokie doing so.
Earl Weiss
7:56 pm on Tuesday, August 16, 2011
Yep, sure, Smart grid will keep your power on when a tree falls and takes out the line running to your house. Hang on a second, need to go pick up some eggs left by the easter Bunny.
You can say Com ed is incompetenet, but we had severe storms. No level of competence will keep trees from falling on lines during storms. Sad that they are now using this as a justification for a smart grid rate increase.
John Temmerman
11:30 pm on Tuesday, August 16, 2011
What will keep trees from falling on lines during storms is underground lines. Between comed's outrageous executive salaries, profits and advertising budget, it could be done. The smart grid scheme is paying them money for limiting their liability in a storm. Put the money into underground cables instead.
Louis G. Atsaves
6:23 am on Wednesday, August 17, 2011
Any politician who voted the ComEd smart grid which decreases regulatory oversight should be immediately voted out of office. It is a shame that the meeting was scheduled for 10:00 a.m. on a weekday when most voters work. It took ComEd 6 days to show and turn off electrical power when a neighbor's tree fell on a power line during the June storm. It took them 2 days to turn on power, then we watched and called and called and called while the tree slowly burned through the power line. The Lake Forest Fire Dept. came out 3 times and also called and called and called to no avail.
ComEd's service is the worst in the country according to most studies. The smart grid will not improve service, only their profits. In our case, after watching the tree burn for 4 days (fortunately it was a live tree and not a dead one) in frustration and waiting for it to fall onto our garage, work crews FINALLY showed up on a Sunday afternoon at 4:30 p.m. At 5:00 p.m. a supervisor called the crews and demanded that they return to the shop by 7:00 p.m. because they didn't want to pay any more overtime.
I have one of the burnt logs in my garage now. The other two that the power line completely burned through could not be found in the mess they initially left in my yard when they cut down the tree and freed up the power line.
Quinn should veto that bill. ComEd needs to upgrade their services and rehire all they laid off. And those who voted for the smart grid? Find yourselves a new job!
John MacDougall
7:53 am on Wednesday, August 17, 2011
ComEd's representative at the North Shore Power Summit, President and COO Ann Pramaggiore, stated that she "considers the standards imposed by the proposed bill unusual and more than adequate". Is that a shock to anyone who can fog a mirror?
When asked by the group about her company’s current profit, "she said she did not know".
That's another example of the ComEd culture of disingenuous, evasive, and/or incompetent responses to a direct question. Loosening oversight on ComEd would let the fox guard the hen house.
Richard Schulte
9:15 am on Wednesday, August 17, 2011
Actually, I think ComEd's service is pretty reliable. We don't appreciate something until we lose it.
After Katrina, parts of New Orleans were without power 6 months or more. Don't complain, it could be worse.
John MacDougall
11:27 am on Wednesday, August 17, 2011
You're extremely fortunate if you live in an area that has reliable power. I can understand why you'd be surprised by the level of frustration expressed by so many north shore homeowners.
However, it's abundantly clear (based upon the number and negative tone of anti-ComEd comments) that there is a serious, long-term problem that simply hasn't been addressed. So to say that it "could be worse", while true, is not a satisfactory answer for those of us who have lost power seven times in 2011 alone.
Clif Brown
4:26 pm on Wednesday, August 17, 2011
It really is a matter of where you live. In the place I lived in Evanston for the last ten years (west of the METRA tracks) we had one power failure when the substation down the alley had a fire. These recent storms had no effect on power there. One failure in ten years. That's excellent service.
But we have now moved four blocks from there (east of the METRA tracks) and the power outages are legendary here. The recent storms took down power for 24 hours the first time and 41 hours the second time. We still have both residences so we simply hauled our freezer contents back to the old place. Others lost their freezer contents. A power failure indicator is the elevator floor display. It goes bonkers when power fails and stays that way until manually reset. I have seen it confused several times in the last year. It's not the building itself, but neighborhood power lines.
I can understand how people can be angry, but I am in the middle - great service in one place, regular power failures in another four blocks away, ComEd the provider for both. I understand they called in over 400 crews and I saw utility trucks from out of town. It was a tremendous storm evidenced by all the trees and branches down - how much better could ComEd have done?
We really are stuck - we only have one provider so there is no choice. It's almost as bad with Comcast and AT&T for TV. Citizens and politicians aren't the best judges of highly technical matters. It's a tough call.
liliana fargo
6:31 pm on Wednesday, August 17, 2011
The Smart Grid plan basically will allow ComEd to conveniently manipulate rates, while reducing also supervision from state regulators, and at the end it will preserve and even increase the monopoly power for this company. The plan claims it will allow consumers to closely monitor usage and adjust consumption accordingly, based on a complex rate structure that will change at different times of the day. However, I believe the average consumer will find this system quite confusing, and at the end ComEd will effectively manage to generate extra revenue from the plan.
Spending $1.5 billion dollars on the smart grid technology is like spending on a very expensive anti-thieve equipment for a very old vehicle. Instead of spending valuable resources on an old system, that is already outdated and unreliable, legislators in Illinois should promote alternative sources of energy, to create competition, which is something that legislators in California are already exploring.
In essence, the Smart Grid is only a smart strategy for ComEd, but is not a smart option for residents in Illinois, and is not smart plan for our regional economic development.