ComEd lobbying scandal trips up negotiations for a greener energy plan

The state legislators negotiating a massive new energy reform bill for Illinois are said to have made real progress at their Tuesday working group meeting this past week.

Shortly before the meeting began, a legislator who is a longtime union ally and involved in the talks told me the consensus was that “a pound of flesh” would have to be extracted from Exelon, which wants more subsidies for two nuclear power plants and has been under a dark ethics cloud as the U.S. attorney’s office probes it and its subsidiary ComEd’s Statehouse activities.

Well, lawmakers may want to increase the weight of that flesh to be extracted after a routine federal court hearing was rocked by a bombshell that could complicate the negotiations.

Near the end of a status hearing last week to discuss setting a trial date for the case of four people charged with conspiring to bribe former House Speaker Michael Madigan on behalf of ComEd, the defense attorney for former ComEd lobbyist Mike McClain told U.S. District Court Judge Harry Leinenweber that setting a date would be difficult because “there has been some at least intimations that the government might be seeking a superseding indictment in this matter,” the Chicago Tribune reported.

The defense lawyer for former ComEd vice president and lobbyist John Hooker then chimed in: “We know they are apparently on the brink of a superseding indictment. When are they going to tell us?” the Chicago Sun-Times reported.

The state is rife with speculation that the superseding indictment could be of Madigan, who has denied all wrongdoing and has not been charged.

And that speculation intensified further when the Tribune reported that federal prosecutors had asked a couple of former House Democrats to explain to a grand jury how Madigan controlled the legislative process. Those former members are not subjects of the investigation, the paper reported. Another former legislator told the Tribune he was recently interviewed by federal agents about “Madigan’s role in the process.”

Madigan, of course, was forced out of office in January as a direct result of the federal probe and the resulting deferred prosecution agreement entered into by ComEd’s parent company, Exelon, and the indictments of his former close associates who worked or lobbied for the companies.

And even though much of the federal investigation revolves around the companies’ successful passage of a bill to heavily subsidize two nuclear power plants, Exelon is now asking the Legislature to bail out two more downstate nuke facilities. The company is ostensibly taking a hands-off approach to the bill for obvious reasons, but a union-backed group is advocating on behalf of union members who work at the plants, which means its proposals will directly benefit the company.

While that arrangement allows lawmakers and the governor to avoid talking directly with Exelon and ComEd, it doesn’t change the fact that the end result will have a direct impact on the companies’ bottom lines.

The governor’s financial proposal, based on an independent audit of Exelon’s actual needs, all but guarantees that any bailout number agreed to above that amount would be immediately suspect.

The union group has deemed the governor’s plan inadequate and claims that a similar Synapse audit in New Jersey produced an allegedly inaccurate subsidy projection, which was subsequently rejected by the state’s public utilities commission. Coincidentally (or not) Exelon’s CEO Chris Crane pointed to the same Synapse audit in New Jersey during a recent earnings call with investors.

There has been some talk of basing the first year’s Exelon subsidy on the governor’s proposed level and then allowing the Illinois Commerce Commission, or some other body, to determine the subsidy moving forward. But in New Jersey, the public utilities commission eventually awarded the maximum allowed amount of zero emissions credits to the local nuclear fleet. Even so, a punt to a non-legislative body would have its advantages for legislators up for reelection next year.

The bottom line here is that lawmakers got a fresh reminder last week of the tricky minefield they’re in. And you can’t help but wonder how closely the feds are monitoring the activities surrounding this particular bill.