Amid scandal, ComEd seeks $199 million rate hike that would add $2.20 per month to bills
Still grappling with political fallout from a lobbying scandal, ComEd filed for a proposed $199 million increase in electricity delivery charges Friday, seeking the largest rate hike since 2014.
If approved by state regulators, it would add $2.20 per month to the average residential customer bill beginning in January 2023.
The utility is pushing for the rate hike to fund infrastructure investments as electrification and renewable energy place new demands on the power grid. The filing with the Illinois Commerce Commission launches an eight-month process to determine if the increase is warranted.
“The grid was designed decades before widescale adoption of renewables, electric vehicles, digital devices, industrial electrification and emerging sectors like indoor agriculture,” ComEd CEO Gil Quiniones said in a news release Friday. “We will continue working with local leaders and community groups to ensure the grid can meet the needs of all customers in the 21st century.”
The proposed $199 million rate increase is the largest by ComEd in eight years, and the last under a formula rate system that has been in place since 2011, which granted the utility control over customer-funded investments to improve its power grid. Beginning in 2023, regulators will have more authority over future rate increases.
Last year, ComEd was granted a $46 million rate increase, which added 16 cents per month to current residential bills.
“This is bad news for Illinois consumers who are coming off the most expensive winter heating season in more than decade, and it’s why we’re working to build a more consumer-friendly rate-setting system in Illinois,” Jim Chilsen, a spokesman for the nonprofit Citizens Utility Board, said in a statement. “CUB will review ComEd’s rate-hike request and fight every dollar that can’t be justified.”
In September, Gov. J.B. Pritzker signed the Climate and Equitable Jobs Act into law, which requires Illinois utilities to get 40% of their power from renewable sources such as solar and wind by 2030. It also set a goal of having 1 million electric vehicles registered in Illinois by 2030.
Chicago-based Exelon, the parent of ComEd, spun off Constellation, its former power generation subsidiary, into a standalone company in February. ComEd delivers electricity to more than 4 million customers across northern Illinois.
The clean energy legislation also transitions utilities to “performance-based rate-making,” which could make it more challenging for ComEd to raise rates in the future.
“In simple terms, what’s coming next is more transparency and collaboration with stakeholders in terms of the investments that we’re making,” Chad Newhouse, ComEd’s vice president of regulatory policy and strategy, told the Tribune.
Newhouse said the proposed delivery rate increase next year may be offset by lower supply costs this summer, which are expected to reduce customer bills by as much as $10 per month. The ICC is also reviewing a proposed acceleration of benefits from the Tax Cuts and Jobs Act of 2017 that would reduce delivery costs by 82 cents per month through 2025.
Electric delivery charges represent about 40% of a customer’s total bill.
The political climate in Springfield may make any proposed rate increase a hard sell for ComEd.
Quiniones, who formerly headed the New York Power Authority, the nation’s largest state public power generator, became CEO of ComEd in November, inheriting a utility with an improving performance track record, and a lingering political scandal. In 2020, ComEd agreed to pay a $200 million fine in exchange for federal prosecutors dropping charges against the utility in an alleged bribery scheme to pass favorable legislation.
Despite the controversy, Newhouse believes the investment return over the past decade, from improved reliability to increased energy efficiency, shows ComEd can be a “trusted steward” for customer-funded infrastructure improvements.
Newhouse is hoping the ICC, which will have “more authority to weigh in” on the utility’s investments going forward, will agree.
“Customers do get value from our investments, and it takes investments to meet customer expectations,” Newhouse said. “Despite where stakeholders, the commission and the legislature may be, that’s going to continue to be our mantra.”