Utility Company Gets Reigned In; Customers to Get Refunds

February 27, 2012

If you live in metro Chicago real estate and use ComEd for your electrical needs, you could have a refund coming to you.

Following a long battle over whether Commonwealth Edison wrongly inflated consumer electricity rates, the Illinois Commerce Commission last week ordered the utility company to refund its customers a combined $36.7 million.

The case stems from an appeal of a 2007 rate case. In 2010, Illinois Attorney General Lisa Madigan and the Citizen’s Utility Board (CUB) won an appeal of part of a $274 million rate hike ComEd had been granted.

The Illinois Appellate Court ruled that the ICC was wrong to allow ComEd to raise rates without factoring in “accumulated depreciation” of the utility‚Äôs assets, which includes such things as trucks, poles, wires and other equipment. Depreciation of those assets lowers the value of a utility, which should factor into how big a rate hike a company should be granted.

After the appeal was won, the case went back to the ICC, where consumer advocates fought for a refund. A judge recommended the ICC not order a refund, stating that the commission did not have the authority. Last week’s ICC decision overruled that decision.

While it is unclear how much of a refund each customer will receive, there is a bigger picture here: The decision sets a precedent on rate hikes in the future. In accounting for depreciation, the ICC recently reduced ComEd’s most recent rate hike request of $396 million by 60 percent.

“The Citizens Utility Board (CUB) applauds the Illinois Commerce Commission (ICC) for its 5-0 vote on Thursday approving a $36.7 million refund for Commonwealth Edison customers,” said CUB Executive Director David Kolata.

“It’s always good news when customers get money back in their pockets. But this victory is even more significant because the Appellate Court ruling that sparked the refund set a precedent in rate cases that will save consumers money on their utility bills for years to come.”

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