Illinois PIRG calls on regulators to reject ComEd’s $5.1 billion profit grab

Recommendations would save customers $3.7 billion over four years

In a legal brief filed Tuesday, Illinois PIRG called on regulators to reject ComEd’s proposed $5.1 billion in profits over four years. If the Illinois Commerce Commission adopts Illinois PIRG’s recommendations, combined with those made by the Office of the Illinois Attorney General, it would save customers $3.7 billion over those four years.

From 2012 through 2023 (as authorized), ComEd has earned an average annual profit of $557 million under the “formula rate” process. The formula rate policy was the crowning policy achievement of the bribery scheme for which four former ComEd executives and lobbyists were found guilty by a federal jury in May. ComEd is now asking the Commission to approve an average annual profit of $1.3 billion for the next four years under the new “multi-year rate plan” rate-setting process.

“Common sense and expert analysis arrive at the same conclusion: The Illinois Commerce Commission should not reward ComEd by more than doubling its profits,” said Illinois PIRG Director Abe Scarr. “Despite its scandal, ComEd convinced the Illinois General Assembly to extend formula rate policies that virtually eliminate all of the risk ComEd faces. No risk should mean no reward for ComEd.”

ComEd is asking the Commission to approve a 10.5% profit rate, known as the Return on Equity, or ROE, in 2024, and for it to grow to 10.65% by 2027. That is up from the current 7.85% ROE in 2023, the last year of the formula rate process.

The new multi-year rate setting process allows for this potential increase in ComEd’s profit rate while maintaining the “profit guarantee” of the old formula rate process, making the new rate-setting process potentially much more lucrative for ComEd. Illinois PIRG loudly objected to this policy outcome when it was included in the Climate and Equitable Jobs Act in 2021, describing it as a “windfall” for ComEd.

An expert witness, Ed Bodmer, working on behalf of Illinois PIRG, instead recommended a 6.5% ROE. In its initial brief also filed Tuesday, the Office of the Attorney General supported the 6.5% ROE recommendation as well. Multiple parties, including the City of Chicago, Commission Staff, CUB Illinois, Walmart, and others, all asked the Commission to reject ComEd’s excessive ROE proposal.

“ComEd customers should not be forced to pay billions of dollars to unnecessarily pad the company’s already-generous profits,” said Dan Schneider, Senior Staff Attorney at Legal Action Chicago, counsel for Illinois PIRG in the case. “Electricity is essential to everyday life, like food, clothing, and shelter, and the more people have to pay for electricity, the less they have to meet other needs. We hope that regulators will agree that protecting consumers is more important than increasing ComEd’s profits.”

The Illinois Commerce Commission will decide on ComEd’s multi-year rate plan by the end of the year and new rates will go into effect in 2024.