Friday, February 10, 2006

Zapped!!

Crain's has an article about the unpleasant surprise soon to be lurking in people's mailboxes. It discusses the fact that New Jersey has a power auction very similar to the one recently approved for Illinois to commence in 2007.

And in what it calls "an ominous sign for Illinois electricity rates", it notes that "New Jersey power bills will rise more than 13% this year under a new system that lets power generators bid for the right to provide electricity to the state’s utilities."

Excerpts from the article (emphasis added):

If the results here are similar to New Jersey’s, the hit to local electricity bills could be far higher given that the price of power established in the New Jersey auction was 57% higher than last year’s.

ComEd has pledged to hold annual increases to single digits for three years beginning in 2007 when a nine-year state-mandated freeze on its rates expires. If the prices it charges consumers are below its cost to generators, ComEd insists it should collect the difference, with interest, after the three years.

“The results in New Jersey are really what we expected to see,” a ComEd spokeswoman said.

A ComEd critic concurred with that assessment of the differences between the markets, but warned that the New Jersey results still portend sharply higher prices here.

“The New Jersey auction is a glimpse into the future,” said Howard Learner, executive director of the Environmental Law & Policy Center. “This is not good news for Illinois consumers. Residents and business customers are in for sticker shock.”

The part that I italicized is what really caught my attention. So ComEd agrees to a freeze, but has a safety net that protects it's baseline cost, plus interest? Looks like a good deal for ComEd, not so sure about it's customers.

1 Comments:

At February 10, 2006 at 1:19 PM, Anonymous Anonymous said...

Rep. Fritchey:

ComEd is the same company that tried to convince the General Assembly to allow it to charge ComEd customers higher rates in order to finance their attempted purchase of Illinois Power. A rate hike that didn't have anything to do with delivering or producing power for the customers charged. Brilliant.

Thankfully, Speaker Madigan KO'ed the legislation. I am not a fan of the Speaker, but he stood tall that day.

ComEd wants our money and they are going to get it one way or the other. If anyone thinks the ICC is going to be able to police this, then you probably think George Ryan is innocent.

Hopefully, ComEd won't charge payday loan interest rates on their "generous" offer to limit the hikes in the next three years to the single digits.

What this really does is lay bare the fact that all the soaring language in the Public Utilties Act about equity and fairness to customers is just a bunch of hot air.

I am not opposed to ComEd charging higher rates. However, I am outraged that ComEd will effectively be setting their own rates and the regulators, weak though they were, are now out of the picture for all practical purposes.

I guess the ICC will have to spend more time on regulating railroad crossings and moving companies.

 

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