Mayor says util­ity must re­form to keep city fran­chise

Chicago Sun-Times - - TOP NEWS - BY DAVID ROEDER AND FRAN SPIELMAN Staff Re­porters

ComEd, which con­fessed to pay­ing $1.3 mil­lion in bribes to as­so­ciates of Illi­nois House Speaker Michael Madi­gan, must en­act ethics re­form and other pol­icy changes be­fore the city will ex­tend the util­ity’s fran­chise agree­ment, Mayor Lori Light­foot said Mon­day.

Light­foot de­liv­ered a shape-upor-else ul­ti­ma­tum in a let­ter she emailed to ComEd CEO Joseph Dominguez. The agree­ment that al­lows ComEd to pro­vide elec­tric­ity within Chicago ex­pires at the end of 2020, but how much lever­age the city has in the sit­u­a­tion is de­bat­able.

ComEd’s owner, Ex­elon, will pay $200 mil­lion to set­tle fed­eral cor­rup­tion charges and agreed to con­tinue co­op­er­at­ing in the Madi­gan-fo­cused probe. A copy of Light­foot’s let­ter was given to the Sun-Times.

Say­ing she is “deeply dis­turbed” by the com­pany’s ad­mis­sion, the mayor told Dominguez she finds “the com­pany’s re­sponse thus far to this clearly uneth­i­cal be­hav­ior to be in­ad­e­quate. Good gov­er­nance and trans­parency have been guid­ing prin­ci­ples for my ad­min­is­tra­tion, and I ex­pect the same prin­ci­pled ap­proach from any com­pany that does busi­ness with the City of Chicago.”

She added: “The City will not make rash de­ci­sions about such an im­por­tant and es­sen­tial ser­vice as elec­tric­ity.” Light­foot said to re­new the fran­chise, “the City ex­pects the com­pany to im­ple­ment (1) a com­pre­hen­sive ethics re­form plan that re­builds trust with the City, its res­i­dents and its busi­nesses, and (2) my ad­min­is­tra­tion’s pol­icy pri­or­i­ties around en­ergy and sus­tain­abil­ity, eq­ui­table eco­nomic de­vel­op­ment, util­ity af­ford­abil­ity and trans­parency.”

Top ex­ec­u­tives at Chicago-based Ex­elon, in apol­o­giz­ing for the mis­con­duct, said they have re­moved in­di­vid­u­als in­volved in the bribery, which they said was de­signed to curry fa­vor from Madi­gan on im­por­tant leg­is­la­tion. ComEd ad­mit­ted to fed­eral charges that it de­rived at least $150 mil­lion in ben­e­fits from the scheme over an eight-year pe­riod end­ing in 2019. Madi­gan has not been charged.

Re­spond­ing to the mayor, ComEd spokesman Paul Els­berg said: “We have a lot of work to do to re­build trust, and our com­mit­ment to work­ing col­lab­o­ra­tively with the City is stronger than ever — to build on the enor­mous cus­tomer ben­e­fits we’ve de­liv­ered, in­clud­ing 70 per­cent im­proved re­li­a­bil­ity since 2012, best-ever cus­tomer sat­is­fac­tion and bil­lions of dol­lars in sav­ings to cus­tomers, at the same time that res­i­den­tial cus­tomers’ bills are less than they were nearly a decade ago and as ComEd re­quests a third de­liv­ery rate de­crease in a row, the fifth in 10 years.”

Els­berg said ComEd has estab­lished “four new manda­tory poli­cies that gov­ern how em­ploy­ees in­ter­act with pub­lic of­fi­cials.”

The end of the fran­chise agree­ment — in this case, a 20-year deal — pro­vides any Chicago mayor with a rare op­por­tu­nity to ex­tract con­ces­sions from ComEd. But it’s highly doubt­ful the city could take the ex­treme po­si­tion and take over elec­tric ser­vice it­self.

That step would re­quire City Hall to pay bil­lions of dol­lars for ComEd’s as­sets here, an un­likely prospect at any time but es­pe­cially now, with the mu­nic­i­pal bud­get ripped apart by COVID-19. Light­foot may be lim­ited to de­mand­ing ac­tion from ComEd that in some cases might come any­way as part of its set­tle­ment with the U.S. at­tor­ney’s of­fice.

In the past, Light­foot has said she would in­sist on an end to util­ity shutoffs as part of a new fran­chise deal. Her let­ter did not con­tain that spe­cific de­mand. For res­i­dents and small busi­nesses, ComEd has sus­pended shutoffs at least Au­gust.

In her let­ter to Dominguez, Light­foot said ComEd’s $200 mil­lion fine must be mea­sured against its 2019 revenue of $5.75 bil­lion and its 2019 profit of $688 mil­lion. She wrote, “Put sim­ply, ComEd touches ev­ery Chicagoan’s daily life; I can only imag­ine the sig­nif­i­cant im­pact a $200 mil­lion in­vest­ment of money in the city (ver­sus a fine) would have had im­prov­ing our neigh­bor­hoods, as­sist­ing low­in­come con­sumers, or achiev­ing clean en­ergy goals.”

Light­foot de­manded “a sig­nif­i­cant com­mit­ment from the com­pany to right his­toric wrongs.”


Mayor Lori Light­foot said in a let­ter to ComEd’s CEO, “The City will not make rash de­ci­sions about such an im­por­tant and es­sen­tial ser­vice as elec­tric­ity.”

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