Statement by CUB Executive Director David Kolata on ICC Ruling on ComEd Formula Rate Plan
CHICAGO, May 29, 2012 /PRNewswire-USNewswire/ -- The Citizens Utility Board (CUB) commends the Illinois Commerce Commission (ICC) for standing up for consumers and ordering a big Commonwealth Edison rate cut today. While CUB continues to crunch the numbers, it appears that the ICC's final order gives customers a rate decrease of at least $146 million—the amount recommended by a state regulatory judge. Part of doing the smart-grid right is making sure consumers don't pay inflated rates, and this is a step in the right direction. But this is just a first step. CUB's focus is working to minimize future ComEd rate hikes and pushing the utility to improve the power grid in a way that cuts future electric bills and improves reliability.
*ComEd filed its proposal for new electric rates after passage of the "Energy Infrastructure and Modernization Act," or the "smart-grid bill," late last year. The new law uses a formula to help determine ComEd rates each year for up to the next decade to pay for $2.6 billion in power-grid upgrades. Today's decision plugs final numbers into the formula created by the smart-grid legislation.
*As the case neared a final decision, CUB, ICC staff, and Illinois Attorney General Lisa Madigan's office supported the state regulatory judge's recommendation of a $146 million decrease.
*In arguing for a rate cut, consumer advocates showed that ComEd inflated the amount of income it should earn on new plants by neglecting to include the applicable tax depreciation and inflated the amount of cash-on-hand it needed to cover its operations.
*Today's decision will result in new rates from June through December 2012. Then, under the law, every January consumers could see increases according to the formula, which sets the utility's Return on Equity (ROE), or profit rate for shareholders.
*Although CUB did not support the smart-grid legislation, citing too few consumer protections, the group's new focus is pushing ComEd to improve the power grid in a way that cuts future electric bills and improves reliability—so customers don't get slapped with the bill for the upgrades without the benefits. The consumer group will take part in yearly reviews of the company's spending and will be able to protest capital and operational expenditures.
CUB is Illinois' leading nonprofit utility watchdog organization. Created by the Illinois Legislature, CUB opened its doors in 1984 to represent the interests of residential and small-business utility customers. Since then, CUB has helped save consumers more than $10 billion by blocking rate hikes and securing refunds. For more information, call CUB's Consumer Hotline at 1-800-669-5556, or visit www.CitizensUtilityBoard.org.
SOURCE Citizens Utility Board