May
05

ComEd Offers Illinois a (Questionable) Bone, Then Yanks It Away

May 05, 2010

Earlier today we posted a story about DuPage County residents facing an increase in water rates. Now we have another utility controversy.

Commonwealth Edison, which supplies electricity to Chicago and surrounding suburbs, offered to give our financially broke state of Illinois $500 million, and in return, ComEd would be allowed to charge its customers the current rate until June 2014. Actually, ComEd’s rates are expected to increase 8 percent in June; that’s the rate that would be locked in for the next four years.

State lawmakers called foul play, voicing concern that the rate freeze would result in Illinois consumers eventually paying more than the market rate for electricity, a utility that recently has seen a decline in demand. In fact, expectations that profits will continue to fall have caused the utility giant’s stock to fall.

The Citizens Utility Board and Illinois Attorney General Lisa Madigan were both against ComEd’s offer, but Governor Pat Quinn and some other Democratic leaders, who are facing a $13 billion state deficit issue, considered it.

To sweeten the deal, ComEd’s offer also included a $1 billion commitment to making Illinois’ electrical system more energy efficient, which would create more than 2,000 “green” jobs.

Guess no decision has to be made: On Wednesday, ComEd and its parent company, Exelon, canceled a scheduled news conference, and then released a statement saying that they were taking back their offer. They also denied that they were scheming to keep Illinois customer bills high.

“[This deal] would have provided funds to a state in turmoil, provided more than 2,000 jobs, invested more than a billion dollars in grid modernization and infrastructure improvements. It also would have provided customers with rate stability while preserving the right to choose market-based rates. No customer would have been required to pay above-market rates,” ComEd said in a statement. “In last few days, however, it has become clear that there is not enough support in Springfield to continue pursuing this course. We acknowledge and respect the concerns many public officials have and will move on.”

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