In December, the Illinois Commerce Commission decided on rate cases for both electric utilities in Illinois — ComEd and Ameren. Focusing on ComEd, the company had asked to charge customers an additional $5 billion for upgrades to its distribution grid over the next four years. The ICC allowed it an increase of $1.89 billion but ruled that ComEd failed to make its case on the rest and directed it to provide more information.
The portion of ComEd’s proposed spending the ICC asked the company to refile — the “Grid Plan” — lays out ComEd’s approach to modernize the electric grid, making it capable of integrating more distributed energy resources (like solar panels), electric vehicles, and electrified homes and businesses, consistent with the state’s transition away from fossil fuels. This transition is important, but, as the law requires, it must be done cost-effectively without overburdening consumers.
In a recent Sun-Times commentary piece, the International Brotherhood of Electrical Workers shared the ICC’s rejection of ComEd’s grid plan puts off the work required to meet the state’s clean energy goals, simply kicking the can down the road.
But the ICC didn’t “reject” grid investments. It required the utilities to refile plans with more information to justify spending. The utilities are doing that now and plan to refile by March.
Why would the ICC call for that? ComEd’s original request for $5 billion in revenues in the next four years would require large rate increases for all electric customers. For residential customers, this could amount to bill increases of more than $17 per month and $200 annually by 2027.
Further, these costs would not go away after four years. When the ICC approves a long-term investment like grid infrastructure, the costs are spread out over decades, plus a “rate of return,” like interest on a mortgage. Thus, the ICC is considering costs that will impact customers’ bills for decades to come.
With costs this high, the ICC is right to act carefully to avoid unnecessary rate hikes that could hurt Illinois consumers and the state’s economy.
It’s also important to consider the electric rate cases in the context of Illinois’ overall energy landscape. The state legislature has directed a phase-down of fossil fuel use, which will require investment in the electric grid to enable new technologies, like electric heat pumps, to heat our homes and businesses.
Don’t force public to pay twice
But it must also result in savings on the natural gas system maintained by Peoples Gas. The public should not be forced to pay twice: once for ComEd’s billion-dollar grid buildout for electrification, and a second time for People Gas’s billion-dollar buildout and replacement of its gas pipeline system for another 30 to 40 years. In its recent decisions on both gas and electric cases, the ICC has carefully considered what costs are necessary and where the state can pull back.
The utilities appear to be taking the ICC’s order seriously and working hard with stakeholders to put together improved grid plans. This will result in improved, more transparent and more cost-effective projects. The ICC is doing its job of ensuring the utilities do not increase customer rates unnecessarily. Yes, putting our clean energy workforce to work is important. But so are energy bills and affordability, especially for lower-income Illinoisans.
This grid-planning process is new and difficult. It’s not surprising the utilities’ first grid plans fell a bit short. But one thing is certain: We need to give ICC Chairman Doug Scott and his fellow commissioners credit and some space to lead and help chart the course for an equitable and affordable transition to clean energy.
We’re glad the IBEW, the utilities, the ICC and many other stakeholders agree that clean energy goals are important for Illinois. We have a shared destination, and we all need to keep working together with the ICC to reach that destination while keeping costs manageable.
Brad Klein is a senior attorney at the Environmental Law & Policy Center.
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