Holding ComEd accountable

In November, utility regulators at the Illinois Commerce Commission handed down decisions in Peoples Gas’ and other gas utilities’ rate cases that I described as a “regulatory earthquake.” Last week, the Commission’s decisions in the ComEd and Ameren cases was another seismic shift. 

First and foremost, the Commission rejected the two utilities’ grid plans, finding they did not comply with the law in a number of specific ways. The Commission ordered the utilities to resubmit compliant plans within three months. This is a really big deal. It shows the Commission is fulfilling its duty to vigorously advance the public interest. 

A more traditional regulatory approach – one that sees the regulator’s role as balancing competing interests rather than promoting the public interest – would have been to approve the plans with modifications, and potentially require future “workshops” to address ongoing deficiencies. With history as our guide, those workshops would not suffice to ensure utility compliance. 

Ensuring public value

Among the ways in which the Commission found the grid plans fell short was in including a cost benefit analysis of proposed investments. This is core to Illinois PIRG’s utility watchdog program: ensuring that utility policy maximizes benefits for utility customers and the public in the form of reliable service, environmental protection, and reasonable bills. For too long, Illinois policy has failed to maximize these benefits, inordinately tipping the scales to the benefit of utilities, in the form of excess profits. 

As I wrote in an Opinion Editorial in the Chicago Sun Times, as Illinois accelerates the clean energy transition, now is a critical time for the Commission to exercise robust oversight.

Reining in excessive profits

Another key decision the Commission made was lowering ComEd’s profit rate, known as the return on equity or ROE, from a proposed 10.5% to 8.9%. That decision alone could save ComEd customers hundreds of millions of dollars. 

As I wrote in an Opinion Editorial in the Chicago Tribune, we think ComEd’s ROE should be even lower, given Illinois policies that virtually guarantee ComEd’s profits. We were pleased that Commission Chair Doug Scott invited parties to return to the Commission in future proceedings with more analysis of ROEs, communicating an openness to setting even lower ROEs in the future. 

Based on rejecting ComEd’s grid plan and approving a lower ROE, the Commission slashed the company’s four-year rate hike from $1.5 billion to $506 million. The rate hike will likely increase assuming the Commission approves compliant grid plans at some point next year. 

Our work to hold ComEd accountable

I’m proud of the work Illinois PIRG has done over the years as a ComEd watchdog, helping lay the groundwork for these decisions. Some of the work we did included:

• We built a powerful coalition and successfully removed ComEd’s anti-consumer, anti-rooftop solar “demand charge” policy from the 2016 omnibus energy bill (in the midst of ComEd’s bribery scheme).
• We led the opposition to ComEd’s attempt to extend its “formula rate” scheme in 2019, months before federal prosecutors began their home raids in the ComEd bribery scheme investigation.
• We filed and eventually settled an Open Meetings Act lawsuit against the Illinois Commerce Commission that alleged it deliberately excluded select consumer advocates and industry experts from participating in its NextGrid Study process, while allowing ComEd and Ameren to fund, shape, and approve a report designed to influence Illinois energy policy.
• When the news of the ComEd scandal broke, we were ready with hard-hitting research and analysis showing the practical harms of its scheme. 
• We released a groundbreaking, in depth report documenting the harm to customers and the broken promises of the “formula rate” law, the crowning achievement of the ComEd scheme. 
• We formed a new coalition specifically to achieve utility accountability in the 2021 energy legislation. 
• We spoke out against the eventual continuation of formula rate profit guarantees included in the 2021 energy legislation. 
• We formally intervened in the ComEd rate case this year, specifically arguing for a lower profit rate for ComEd.

With the support of our members and partners, we’ll continue to watchdog ComEd and other utilities.