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Jul 17, 2007 7:04 pm US/Central
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ComEd, State Agree To Massive Rate Relief
Source: State, Big Utilities Reach Deal For Relief After Rate Hike
by Mike Flannery
CHICAGO (CBS) ―
Relief from soaring electric rates may finally be in sight, but some consumers need a break right now.
CBS 2 Political Editor Mike Flannery reports that it's a deal that would cut Com Ed's recent rate hike by about $75 a year for a typical consumer and many will save much more than that.
With only a few final details still to be worked out, sources in Springfield said ComEd is offering rate relief worth about $283 million this year alone and $1 billion overall. Some consumers can't afford to wait.
Orlando Jones has a degenerative spinal condition that is so intensely painful that he can no longer work.
The 50-year old former security guard uses a plug-in electrical stimulator to deaden some of the pain.
ComEd sent a notice threatening to cut off electricity this Thursday unless he pays $742, almost all of his monthly $767 Social Security disability check.
Jones said, "If they shut my power off, I will immediately have to go the hospital."
When we called ComEd, they said they would not disconnect Jones and would try to help. Other consumers may get a break, too.
After nine months of bitter behind-the-scenes battling, sources said the General Assembly could soon vote on proposed rate relief.
A typical annual bill that last year was $720 is now $895. The proposal would cut it to about $795, then raise it step-by-step back to $895 by 2010.
David Kolata, Executive Director of the Citizens Utility Board, said "We are encouraged that the political system has responded like we hoped it would, recognized that there's a crisis and moved toward solving it."
Although newspaper editorials criticized Illinois House Speaker Michael Madigan for demanding $1 billion in rate relief, he's getting credit now that he appears to have won just that.
Mayor Richard M. Daley said, "Madigan did a tremendous job, you know, on it. Like anything else, energy cost is one of the most significant costs, besides real estate taxes (to consumers)."
In addition to the $1 billion overall savings for consumers, sources say a 236-page piece of draft legislation is circulating in the State Capitol.
It is a radical rewrite of the utility deregulation deal in the late 1990s, abolishing, for example, the complicated reverse auction that produced the staggering rate increases that took effect at the beginning of this year for both Chicago area ComEd customers and downstate Ameren customers.
On the WTTW-TV program "Chicago Tonight," Madigan explained what happened after his House of Representatives passed a bill freezing electric rates last winter.
"It was the advancement or the rate freeze legislation which brought the utilities to the table, and we have negotiated with them over several weeks, and we are now prepared to announce a rate reduction plan that will cause an excess of $1 billion – that's $1 billion of savings for the electric rate payers all across the State of Illinois," Madigan said.
"We've done very well; it's a very difficult issue, a very difficult negotiation," Madigan added. "But as I said, we think we'll make an announcement this week there will be rate reductions amounting to $1 billion all across Illinois."
One source suggests the deal could be publicly unveiled as soon as Wednesday.
If the deal flies through the House and Senate, the governor, who has contributed very little to the negotiations, nonetheless said he would sign it.
That would remove one of the biggest behind-the-scenes obstacles that has been blocking progress on a state budget.
The rate hikes for ComEd and downstate power company Ameren went into effect at the beginning of the year, after a 10-year rate freeze ended and the power auction was held. Attorney General Lisa Madigan said she found evidence of price fixing at the auction.
Critics have said if the rate hikes were not instituted, ComEd and Ameren could be sent into bankruptcy.
For more information on how consumers can get assistance with rising electric bills, call 888-806-CARE (888-806-2273).
(© MMVII, CBS Broadcasting Inc. All Rights Reserved.)