Officials Seek More Oversight Of ComEd With Smart-Grid Bill
Current version doesn't put enough pressure on utility company, critics say.
Lake Bluff Village Administrator Drew Irwin wants to make sure ComEd doesn't forget the smaller communities when it comes to power outages.
"We get very little attention,” Irwin said. “Small communities had the same problems. I'm glad to see ComEd will be taking a more community-oriented approach.”
- See related story: ComEd's Legislative Support Evaporates
A number of municipal officials testified about the difficulties their communities faced because of the outages after the June 21 and July 11 storms at Tuesday's hearing of the Illinois House Public Utilities Committee in Highland Park.
State Rep. Karen May, D-Highland Park, arranged the meeting in the northern suburbs after more than 1.2 million ComEd customers were left without power in the aftermath of storms June 21 and July 11.
Longtime Highland Park City Manager Dave Limardi has seen these problems for more than 30 years.
“I’ve been dealing with ComEd since 1977, and the issues are the same now as they were then,” Limardi said. He also complained city staff must handle complaints the utility fails to resolve. “My staff shouldn’t be doing ComEd’s work. They should be doing the work of the people of Highland Park.”
May also wants to see ComEd immediately improve poorly performing circuits that have been identified, rather than wait for a complete plan.
More Oversight, Fewer Returns
ComEd President and Chief Operating Officer Ann Pramaggiore said smart-grid legislation passed by the Legislature and now under a veto threat by Gov. Patrick Quinn will go a long way toward solving many of the problems that kept residents without power for days this summer.
Of the people sitting on the Illinois House Public Utilities Committee, May and state Rep. Robyn Gable, D-Evanston voted for the bill, while state Reps. Daniel Biss, D-Evanston, Elaine Nekritz, D-Northbrook, and Sid Mathias, R-Buffalo Grove, opposed it. All want changes to force better performance.
Biss wants to start by severely limiting the potential return ComEd can achieve on its 10-year investment to improve reliability and storm restoration. The company also will install meters that automatically let it know if a customer is out of power.
“Their return on equity is tied to treasuries, which are at a historic low,” Biss said. “Any reasonable economist will tell you treasuries are going to go up.”
According to Bankrate.com, most U.S. Treasury yields are hovering below 1 percent.
This structure will give ComEd a potentially high return in even a mild economic recovery, according to Biss.
“If rates don’t go up it will be very bad for our economy,” he said. “We can’t sustain these low rates.”
Before Nekritz can support the bill, she wants to see more oversight by the Illinois Commerce Commission. The ICC regulates ComEd. While giving the utility performance standards, the law reduces the ICC’s ability to regulate.
As written, the smart-grid legislation reduces ICC regulation and adds performance standards ComEd must meet regarding reliability and performance. According to Pramaggiore, that amount is in excess of $20 million a year.
“That’s nothing for a company that earns billions,” Biss said. “It has to be painful to force performance."
Concerns About Profits
Pramaggiore considers the standards imposed by the proposed bill unusual and more than adequate. She considers it a major concession made by her company to members of the Legislature.
“You don’t see this model anywhere else in the United States. There are performance metrics we have to live up to,” Pramaggiore said. “This is a good model and we stand by it."
When Biss asked Pramaggiore her company’s current profit, she said she did not know.
Wilmette Village President Chris Canning asked the committee members to rescind the legislation and replace it with a law that would make ComEd more accountable. He was speaking both for his community and for the Northwest Municipal Conference, which he chairs.
“We need an inquiry that is driven by data,” Canning said. “If we don’t do something now we’re going to have another meeting 10 years from now.”