Illinois Legislature must power up ethics reforms for utility companies

Illinois is more than ready for utility ethics reform. Last July, ComEd entered into a deferred federal prosecution agreement in which the electric utility paid $200 million and admitted to a longtime scheme involving jobs and contracts to influence allies of former House Speaker Michael Madigan. Reformers say the scheme illustrated the outsized ability of utility companies to shape state legislation over the years in a way that has cost consumers billions of dollars.

“If there is anything that ComEd has shown, it is that there is a compelling need for better accountability and reform in the utility regulatory system in Illinois and in the way utility laws get decided by the Legislature,” Howard A. Learner, executive director of the Environmental Policy & Law Center, told us on Friday.

We agree. Reforming the way the Legislature enacts utility legislation and oversees rate hikes is long overdue. Gov. J.B. Pritzker said as much last August when he promised: “Their days of outsized influence on the process are ending.”

Now, Pritzker and the Legislature must follow through.

Along with other energy bills that have been introduced this session, a major one titled the Clean Energy Jobs Act advanced out of committee last week with stronger ethics language for utilities, including making permanent the hiring and lobbying reforms ComEd agreed to over the life of its deferred prosecution agreement and installing an independent monitor at each of the state’s utilities.

On Thursday, AARP Illinois, the Illinois Public Interest Research Group and the Environmental Law & Policy Center announced the creation of a new coalition, Take Back Our Power, to push for a series of reforms.

Among those reforms, some of which overlap with those in CEJA, are: returning some of the excess profits ComEd made through its scheme to ratepayers; conducting a thorough, independent investigation of ComEd; banning political donations by regulated utilities, and restoring the oversight authority by utility regulators that has been chipped away over time.

Illinois should also stop guaranteeing profits to utilities through automatic rate hikes. ComEd has benefited from so-called formula rates, a part of the Energy Infrastructure Modernization Act enacted in 2011, which made it easier for ComEd to charge more for electricity without going before the Illinois Commerce Commission. Illinois PIRG says formula rates have raised ComEd delivery rates by 37% and fattened the utility’s wallet to the tune of $5 billion.

Representatives of utilities say they need formula rates because their shareholders want certainty. But doesn’t everyone?

Illinois has ambitious plans to funnel more renewable energy into its power grid while at the same time electrifying more of its transportation and building sectors, which will need billions of dollars of investment. The money to do that must be spent wisely.

Yes, the Legislature must deal with the budget and other complicated issues in this session. In the end, though, Illinois needs to enact a major energy bill, and that bill should include accountability and ethics reforms for utilities.