ComEd proposes nearly $200 million rate hike

ComEd filed its 2022 Formula Rate Update on Friday that proposed a $199 million rate increase for customers starting in 2023. The proposed rate hike would raise average bills by $2.20 per month. If approved, ComEd will have raised delivery rates by $960 million since 2012, which means customers will be paying 49% more for delivery service than before the start of the controversial  formula rates process.

The proposed rate hike would allow ComEd to make a guaranteed $825 million in profits in 2023. 

“As the cost of energy rises and consumers deal with the worst inflation in decades, ComEd is rewarding itself with rate hikes and massive profits off of its unaccountable spending,” said Illinois PIRG director Abe Scarr. “Unfortunately, the Illinois General Assembly whiffed when it had the chance to pass meaningful utility reform in 2021.”

The 2021 energy bill did not end formula rates as Gov. J.B. Pritzker originally proposed, but rather extended a portion of the current formula rate beyond its original 2022 end date, and incorporated key formula rate policies into the new ratemaking structure starting with 2024 rates, creating a structure that could be even more profitable for ComEd than current formula rates.

As Illinois PIRG detailed in its 2020 report, ComEd’s 2011 formula rate law, at the center of the federal investigation into ComEd and Illinois government officials, has delivered record profits for ComEd and higher delivery rates for customers, while under-delivering on ComEd’s promises to its customers and the public.

ComEd sold formula rates in 2011 as necessary to spend $2.6 billion above baseline on reliability and “smart grid” improvements. With its projected spending in 2022, ComEd will instead have increased its “rate base,” the overall value of its assets off of which it profits, by $7.7 billion, almost three times as much it said the law was needed for. ComEd is projecting increasing its rate base by $990 million in 2022 alone, more than it spent during the height of its smart grid spending.

“ComEd sold formula rates as necessary to improve reliability and modernize the grid,” continued Scarr. “Eleven years and almost $8 billion later, ComEd is still spinning the same old story. At some point, policymakers need to start holding them accountable.”

The value of ComEd’s spending to customers and the public has gone largely unexamined. A recent comprehensive study of ComEd’s grid and its spending under formula rates explicitly did not evaluate whether the benefits of that spending matched “in value the costs of producing them.”