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ComEd gets $199 million increase in final formula-rate case

The Illinois Commerce Commission (ICC) has granted ComEd a $198.9 million rate hike, the third-highest and last increase under the company’s anti-consumer formula rate system that was at the heart of its corruption scandal.

“This is a parting shot from a system that was a bad deal for customers from the start,” CUB Communications Director Jim Chilsen said. “We’re glad to say goodbye to formula rates.  We’ll work hard next year to implement a new, more consumer-friendly rate-setting system that gives ICC commissioners more authority, under the Climate and Equitable Jobs Act (CEJA).”

The ICC ruled on the case on Nov. 17. The increase affects delivery charges—what all customers pay to have the electricity delivered to their homes. Those charges take up about a third to a half of the bill. The new delivery rates, which will take effect on Jan. 1, will increase the average customer’s bills by about $2.20 a month.

When ComEd proposed the $199 million hike back in April, CUB called it bad news, coming off the most expensive winter in more than a decade and heading into a pricey summer. It’s still bad news, as consumers face the prospect of an even more expensive winter in 2022-23.

This is the last time delivery rates will be set according to the state’s “Energy Infrastructure and Modernization Act,” or the “smart-grid bill.” While CUB saw promise in upgrades to the power grid, the consumer group opposed the bill saying it had too few consumer protections to prevent unfair rate hikes.

ComEd admitted to using illegal means to help get the controversial law passed in 2011. The measure used a formula to determine ComEd rates annually to cover electric system upgrades–and customers have paid dearly at the hands of the formula over the last decade. Citing ICC records, Crain’s Chicago Business reported that the $199 million hike brought the total increase in delivery rates under the formula system to about $1 billion, or just over $83 million a year on average.

In 2021, CUB helped pass CEJA, which called for replacing formula rates with a system that gives the ICC more authority and puts more emphasis on customer priorities like affordability and reliability. The new law also led to a $38 million customer refund in connection with the scandal. (That refund was a step in the right direction, but not enough.)

So what happens now that the old formula system is dead? Just a few months ago, state regulators approved a set of performance metrics to be paired with a new multi-year rate plan, under CEJA provisions designed to help Illinois electric customers secure more reliable and affordable electricity service. While there’s a lot of work to be done to implement this new system, CUB said these metrics “prioritize climate, equity and consumers, and that’s good news for our planet and our pocketbooks.”

The new system created by CEJA sets rates for the coming four years. ComEd is expected to file its proposed plan under that new system in January, for rates effective 2024-2027. “This time,” Crain’s reported, “the commission will have the authority the formula took away to set allowed returns and will have input into what investments in the local power grid are needed and what are not.” CUB will be part of those cases.

In the remaining formula-rate case, Ameren’s proposed $83 million increase, CUB and other consumer advocates helped cut the hike by $22 million.