Proceed cautiously on energy bill
Southtown Star Editorial
May 19, 2011 — A push by big energy companies Commonwealth Edison Co. and Ameren Services to circumvent 100 years of precedent and raise rates without state oversight appears to be losing steam, and for that we are thankful.

We remain concerned, however, that an energy bill proposed by state Rep. Kevin McCarthy (D-Orland Park) contains many more curious provisions that could cost consumers, and we remind lawmakers of stiff opposition from not only the public but also from the watchdog group Citizens Utility Board and Attorney General Lisa Madigan.

Essentially, the plan pitched by McCarthy would allow ComEd and Ameren to hike rates on consumers and then seek state approval — a complete reversal of the process that for a century has required the companies to get approval from the Illinois Commerce Commission before raising customer rates.

In addition, the bill guarantees a profit margin of 10.5 percent for the utilities, up from their current guarantee of 10.3 percent. ComEd claims the proposed rate hike would cost consumers an additional $36 each year.

With risk shifted to consumers and profits guaranteed, it’s easy to see why ComEd and Ameren have spent the spring lobbying on behalf of House Bill 14.

But staunch resistance to the bill prompted McCarthy on Tuesday to tell The Associated Press he would stop pushing to give the utilities that much flexibility on rates and instead would seek a shorter rate review process with the ICC.

But foes such as Madigan and CUB remain skeptical and note McCarthy has not yet officially altered the proposed bill. Negotiations are ongoing behind the scenes, and consumer advocates remain on guard.

“There may be new iterations coming in coming days, but there’s no indication he’s dropping the bill,” said Natalie Bauer, a Madigan spokeswoman. “Call it HB 14 or call it something else, the bottom line for the attorney general is that if it includes automatic rate hikes without any kind of cap, that is a deal breaker for us.”

The utility companies say the cash flow they’d reap as a result of this change would help fund a $2.6 billion modernization of the power grid over the next 10 years. Their goal is to build a “Smart Grid,” which they say would help control energy costs by more accurately gauging use.

But skeptics, including CUB and Madigan, say the bill would allow the companies to use the cash for any infrastructure project and carries no guarantee Illinois would have a “Smart Grid” in place at the end of the decade.

We stand with Madigan and CUB in harboring deep skepticism about the bill as proposed and urge the General Assembly and Gov. Pat Quinn to proceed cautiously to overhaul Illinois’ aging power grid.

A change of this magnitude requires thoughtful planning and execution, and HB 14 as proposed is fraught with pitfalls for consumers.