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Commonwealth Edison seeking another rate hike
Feb. 24, 2010 —Commonwealth Edison Co. customers should expect higher electric bills next year.
by Steve Daniels, Crain's Chicago Business The Chicago utility, a unit of Exelon Corp., plans to file with the Illinois Commerce Commission for a rate hike in the second or third quarter, according to a recent investor presentation by Exelon Executive Vice-president William Von Hoene. ComEd didn’t respond to questions about when the rate request would be filed, how much the utility might ask for and why it needs more revenue. The rate-hike request comes on top of an extra $70 million ratepayers will fork over to ComEd beginning in April to cover the utility’s higher costs in 2008 and 2009 from unpaid bills, according to a recent Securities and Exchange Commission filing. A new state enacted law last year allows utilities to collect an additional amount annually to compensate for bad-debt expense above what’s embedded in their rates. ComEd didn’t respond to repeated requests for information on how much the $70 million in additional revenue will increase average electric bills. But, based on past disclosures on rate increases and their impact on bills, it appears the bad-debt recovery will cost average residential ratepayers more than $1 per month. In September 2008, ComEd obtained approval from state regulators for a $270-million rate hike, which at the time the utility said would boost the average household’s electric bill by $4.50 per month. The Illinois Commerce Commission, the state’s utility regulator, will have 11 months to rule on ComEd’s rate hike after it’s filed. ComEd’s rates for delivering power typically account for about one-third of a total electric bill. The remainder is the cost of the power itself, which is purchased on the competitive market by the Illinois Power Agency, a state agency established two years ago after a utility-supported auction system resulted in power prices that raised ComEd bills well over 20%. |