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Fixing ComEd

On Wednesday, the Illinois Commerce Commission heard from the Commonwealth Edison Company to address recently implemented ethics reforms. Illinois PIRG director Abe Scarr made the following comments during the public comment period.

Good morning. My name is Abe Scarr and I am the director of Illinois PIRG. Thank you for the opportunity to provide comment today. Also, thank you to the new Commission leadership for your commitment to operating with increased transparency.

We're here today because of the recent revelations of ComEd's corrupt and illegal schemes, but this corruption is not news. It has been plain to see to anyone willing to look: ComEd and Exelon have used political power to corrupt utility regulation in Illinois.

The state constructed a system to regulate utilities to ensure a public good by creating an opportunity for private profit. ComEd flipped this on its head: guaranteeing private profit while leaving regulators without the tools to hold it accountable to the public.

The Energy Infrastructure Modernization Act, or EIMA, was crafted such that ComEd could quickly and automatically convert massive spending into profits. ComEd's profits have increased by 47% between 2011 and 2019. Its authorized profits were over $739 million in 2019.

EIMA has severely limited Commission authority, while shouldering it with an overwhelming number of proceedings and not enough time, or the proper tools, to analyze utility filings.

To provide one example of how ComEd has undermined this Commission: After passing EIMA, ComEd did not get its desired outcome in several accounting decisions made by the Commission. Having lost in the fact based administrative process, ComEd moved to the General Assembly, where it could win with political power. Through resolutions in 2012 and trailer bill in 2013 ComEd gained almost $400 million in additional profits through 2019. These were accounting changes that added no new service or benefits to ratepayers.

Many benefits that ComEd promised when championing EIMA have not arrived. For example: Green Button Connect is a failure; that ComEd customers won't broadly be able to opt in to time of use rates until 2024 or 2025 is a failure; many more of the uses of smart meters are not currently available to ComEd customers, or are embarrassingly under-utilized. Even for a no-brainer capital investment like Voltage Optimization, ComEd used FEJA to take money that should be used to incentivize energy efficiency.

While customers and the public have seen some benefits from EIMA and FEJA, without proper examination, we have no way of knowing if customers are getting real value from the 40% increase in delivery rates they have paid since 2011, or if alternative investments would have brought more value at lower cost.

Many of the needed reforms will take place in the Illinois General Assembly, and we have a broader agenda we will be taking there, but here are recommendations for Commission action:

* First, the Commission should subject ComEd to a comprehensive audit. The entire grid and its costs must be analyzed. ComEd has lost our trust.

* Second, the commission must demand and receive usable and useful data. Documents must be machine readable and available in workable formats. If a utility uses a different methodology from year to year, they must explain the difference and allow for apples to apple comparisons.

* Finally, the Commission should re-evaluate the relationship between ComEd and Exelon Business Services and affiliated companies. The conflicts of interests in Exelon's ownership of ComEd drive many of our current problems.

Thank you again for the opportunity to provide comment today.

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See also:
* Capitol Fax: ComEd On The Hot Seat.

* WTTW-TV: Could ComEd Customers Get Reimbursed For 'Wrongfully Inflated Rates?'

* Tribune: ComEd Battles On 2 Fronts: Class-Action Lawsuit Demanding Refunds, Federal Investigation.

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Comments welcome.



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Posted on July 30, 2020


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