Governor OKs utility-relief bill - $1 billion deal includes rebates for ComEd, Ameren customers

Governor OKs utility-relief bill - $1 billion deal includes rebates for ComEd, Ameren customers
By Jeffrey Meitrodt |
Copyright © 2007, Chicago Tribune
11:03 PM CDT, August 28, 2007
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SPRINGFIELD - Gov. Rod Blagojevich reluctantly signed a $1 billion electricity-rate relief package Tuesday that dramatically reshapes the Illinois electric market, saying the legislation provides a "good starting point" in protecting consumers against skyrocketing energy charges.

In the Chicago area, ComEd customers will get a one-time credit on their October bill worth an average of $57 for the first eight months of the year, with a credit worth about $7 per month for the rest of the year. That will offset about half of the rate increase that went into effect at the beginning of 2007, ComEd officials said Tuesday.

Lawmakers of both parties were under intense pressure this year to help customers deal with utility bills that more than tripled in some areas. After months of negotiations led by Atty. Gen. Lisa Madigan, legislators crafted a bill that goes far beyond a simple rebate worth an average of $235 over the next three years.

The much-maligned reverse auction, which was widely blamed for this year's price increases, is gone, replaced by a new state agency that will purchase power in the competitive market on behalf of Commonwealth Edison and Ameren.

The legislation also requires energy-efficiency programs that will substantially decrease the growth of electric use in Illinois and make the state a national leader in its goals for using electricity generated by renewable resources such as wind power, biomass and solar power, according to Environment Illinois, one of the state's leading environmental organizations. Only two states have higher goals, the group said.

"We think this is a great step forward," said David Kolata, director of the Citizens Utility Board.

Though Republicans complained that the settlement didn't provide enough money to their hard-hit constituents, proponents said the deal was the best they could squeeze out of the utilities, which originally offered just $152 million in rate relief and customer assistance. The legislation passed easily in both chambers late last month and customers were told to expect their refund checks and credits as soon as August.

But Blagojevich, who sat on the sidelines during the negotiations, angered lawmakers by announcing that he would take up to 60 days to review the bill. He said he thought he might be able to persuade the power companies to sweeten the deal, despite warnings from the attorney general's office that any delays could lead to higher bills.

"After reviewing it, I believe it will provide immediate relief and put us in a position to keep working on longer-term electricity issues that need to be addressed to ensure that electricity in Illinois is affordable," Blagojevich said in a statement.

State Rep. George Scully (D-Flossmoor), the House's lead utility negotiator, said he was happy the governor signed the bill. "But it's very unfortunate that he forced the people of Illinois to wait another month to get rate relief," Scully said.

As it turns out, however, the delay actually will save Ameren customers in Downstate Illinois an additional $17 million because of a recent downturn in energy prices, said Madigan spokeswoman Robyn Ziegler.

As a way to protect consumers against future price hikes, Madigan had persuaded Ameren and ComEd to sign five-year deals for nearly half the power they use on a daily basis. Ameren's prices were good through Aug. 5, while ComEd's were set to expire on Sept. 5.

Energy prices were spiking in the first week of August, leading Madigan to accuse Blagojevich of costing Ameren's customers another $27 million because of the delay in signing the bill into law. But prices have been on a roller coaster ever since, creating savings for Ameren customers. In fact, if the governor had signed the bill last Friday, Ameren customers would have saved an extra $31 million, not $17 million, according to the attorney general's office.

"We felt like it was very important to take our time and fully review this legislation and not rush to a decision based on those previous deadlines," said Blagojevich spokeswoman Rebecca Rausch.

Ameren customers will start receiving checks worth a minimum of $85 in about two weeks, and minimum credits worth $5 a month for the rest of the year. The typical rebate for the year will be $130 to $150, but Ameren's all-electric customers—who got clobbered with big heating bills in the first part of 2007—will receive an average rebate of $400 to $600 this year, said Shelley Epstein, spokesman for Ameren Illinois Utilities. Epstein said some of the company's hardest hit customers will get back more than $1,000 in 2007.

Credits for customers of both utility companies will drop sharply in 2008 and disappear by July 2009, when the full impact of this year's rate increases finally will be felt. Rausch said the governor hopes lawmakers are able to pass new legislation aimed at softening that blow.

"It's imperative that we keep working to make sure that when the rebates run out in three years, consumers aren't socked with huge increases," Rausch said.

Scully said that's wishful thinking because lawmakers agreed not to pursue additional rebates or rate freezes for three years as a condition of the settlement. If lawmakers passed such legislation next year, for instance, ComEd and Ameren would not be bound by the deal and could stop providing credits. The companies would not be able to recover relief already handed out to customers.

"That is the only way we got the electric companies to come up with a billion dollars," Scully said.

jmeitrodt@tribune.com