What happened?
On Wednesday, Dec. 9, the Illinois Commerce Commission (ICC) approved delivery rate cuts for Ameren Illinois and ComEd customers. The ICC voted to give ComEd a delivery rate decrease of about $14 million. The state regulatory body OK’d a decrease of about $48.7 million for Ameren. The lower delivery rates take effect on Jan. 1, 2021.
Note: ComEd originally proposed a decrease of $11.5 million, and Ameren $45.3 million, but those numbers changed with the adoption of various adjustments over the course of the cases.
What part of my bill is impacted?
Electric bills have two parts: delivery and supply. Wednesday’s rulings impact the delivery charges on bills. Customers pay those rates to cover the costs of delivering electricity to their homes, plus a profit for the utility. Those charges take up about a third to a half of the electric bill.
How does Illinois set electric rates?
Illinois sets electric delivery rates for ComEd and Ameren according to the state’s 2011 “Energy Infrastructure and Modernization Act.” That law uses a formula to determine ComEd delivery rates annually to pay for system upgrades.
CUB opposed the formula rate legislation. We argued the law contained too few consumer protections and opened the door to easy rate hikes. Now, that legislation is at the center of a federal investigation in which ComEd is accused of using bribery to get favorable laws passed. The federal government fined ComEd $200 million under a Deferred Prosecution Agreement (DPA) in the case. So far, ComEd has not paid customers restitution.
(If you’re wondering, a market-driven process sets the supply rate, what you pay for the actual electricity. Under state law, utilities cannot profit off those supply rates–they pass the cost of purchasing the electricity onto consumers, with no markup.)
Did the ComEd scandal have any effect on this case before the ICC?
Yes. Back in April, ComEd proposed an $11.5 million rate cut. But after ComEd agreed to some adjustments, the ICC approved a final decrease of about $14 million. For example, the staff of the ICC recommended about $1.78 million in adjustments related to legal fees and other costs connected to the company’s ongoing scandal.
What is CUB’s reaction to the news?
CUB always likes to hear that ComEd and Ameren delivery rates are going down. In the case of ComEd, we’re also relieved that, at a time when the utility is under investigation for a bribery scandal that unleashed excessive costs on consumers, regulators blocked the utility from charging customers for attorneys’ fees and other expenses it has incurred as a result of those investigations.
However, in light of the scandal larger issues loom: ComEd has yet to pay restitution to customers for the harm its actions have caused them, and the company should not stand in the way of reform legislation in Springfield. The best way to make bills more affordable in the future is to end the formula rate regime. That is why CUB is working for the Clean Energy Jobs Act (CEJA), comprehensive energy legislation that would increase consumer protections, hold all utilities accountable and replace the formula rate-setting process with a system that is more ethical, equitable and affordable for Illinois consumers.
Illinois has had the lowest average electric bills in the Midwest for eight straight years, but you know, as we do, we have a lot of work to do.
