The Illinois legislature is considering a bill that allows electric companies to raise rates for consumers in exchange for infrastructure improvements. Ameren and ComEd are pushing for passage of SB 1652, which would allow yearly rate increases to consumers. Electric companies claim that the improvements listed in the bill would save customers money down the line, in exchange for rate increases now.
The improvements specified in SB 1652 include implementation of a “smart grid” to the Illinois system. The smart grid would allow better monitoring of electricity produced and demand by consumers. This allows the electric grid to support the addition of renewable energy sources, such as wind and solar, from companies separate from the electric company. The bill states that such additions of renewable energy to the grid would count towards electric company requirements by the state for renewable energy. The smart grid would give second- party producers, consumers and the electric company real- time updates on usage, production and current price of electricity.
The Citizens Utility Board (CUB) initially opposed the measure as being over-generous to the companies, vague on improvements to be performed and expensive for consumers. Improvements to the bill currently include a five- year sunset clause, limiting rate increases to 2.5% annually, and removal of gas utilities from the bill. CUB has recognized the potential of smart grid implementation to save money for consumers, provided implementation is done right. Even with these improvements, CUB states that further changes are required to specify exactly what improvements will be done by the companies. Correct implementation can save consumers money.
Illinois Attorney General Lisa Madigan and Governor Pat Quinn are on record as opposing the legislation, due to the increased costs for consumers. Madigan points out that ComEd recently received approval for a rate hike worth $156 million. Lobbyists for ComEd started pushing for the new legislation the day after the rate hike had been approved. In a written statement, Madigan said “their legion of lobbyists continues to push legislation that will require consumers to fund billions more in guaranteed profits. This new proposal is just more of the same: a plan that hits consumers where it hurts the most — their wallets.”
Although some community leaders and local government officials support the measure, hoping it would create jobs and prevent outages, the bill’s wording is problematic. Paying for improvements that benefit consumers is praiseworthy, but promises should be spelled out, so that both sides know exactly what they are getting. Those concerned about increases to their electric bills and the promises made by Ameren and ComEd should contact their local legislator (http://www.ilga.gov/house/).