Record-setting rate hike sought by ComEd is more than $914M too high, utility watchdog says

The record-high $1.5 billion rate increase that ComEd is asking state regulators to approve should be slashed by more than 60%, according to consumer advocates who say the unprecedented hike would amount to a “blank check” for a utility that previously admitted its role in a Springfield bribery scheme.

The Citizens Utility Board filed testimony Monday with the Illinois Commerce Commission challenging the increase request filed in January by ComEd, whose hefty ask would bolster its bottom line more than the clean-energy priorities it’s claimed, according to the utility watchdog group.

“It’s immediately apparent that the company is pushing for an excessive profit rate for its shareholders,” CUB Executive Director David Kolata said in a written statement. “ComEd has to maintain its system, but it never deserves a blank check.”

ComEd’s four-year proposal would increase the average Chicago-area residential electric bill by about $6.72 next year and raise it by a cumulative $17 by 2027. That’s about an 18% jump from today’s average $93 bill.

The utility maintains that’s the price of beefing up the electric grid in a statewide effort to roll out a million electric vehicles by 2030 and phase out carbon emissions from power plants by 2050, as outlined in landmark state legislation signed by Gov. J.B. Pritzker in 2021. ComEd says it also needs to better equip its system for severe weather that has become more common due to climate change.

But expert analysis commissioned by CUB and other groups determined ComEd’s shareholder profit rate would increase under the plan from 7.85% to 10.65% over the next four years, the highest of any Illinois electric utility. ComEd is owned by publicly traded Exelon Corp.

CUB is urging state regulators to slash that figure to 9.4% to reduce the overall hike by about $570 million.

The watchdog group also claims ComEd lowballed its projected residential customer usage, pegging it at a figure that’s “unrealistically low, thereby overstating ComEd’s revenue requirement.” CUB’s usage forecast would cut the hike almost $195 million.

Other alleged holes poked into ComEd’s request would save customers an additional $149 million, for a total of $914.5 million in cuts recommended by CUB.

A ComEd spokesperson emailed that “We’re still analyzing CUB’s testimony, but based on an early review, we disagree with CUB’s assessment of our multi-year plans. Our proposed investments provide meaningful benefits to our customers and communities and support the goals of the state’s Climate and Equitable Jobs Act, and we look forward to working with the Commission and all participants in the proceeding to prove that out.”

ComEd leaders have said their current profit rate is among the lowest in the nation and would remain relatively low in 2027.

Next year’s proposed rate hike of roughly $847 million on its own is more than the $827 million that rates climbed over the previous 11 years combined. By 2027, rates will have more than doubled since 2012, according to the Illinois Public Interest Research Group.

CUB noted Exelon has netted more than $5 billion in profits since 2020, when ComEd admitted to taking part in a bribery scheme to influence former Illinois House Speaker Mike Madigan to help pass legislation favorable to the utility in return for jobs, contracts and money for Madigan associates. That included a formula rate law, set to expire next year, that gave ComEd some leeway to adjust its rates without regulator approval.

Earlier this month, two former ComEd executives and two former consultants were convicted of a nearly decadelong conspiracy to bribe Madigan to benefit ComEd. Madigan, slated for trial next year, has pleaded not guilty.

ComEd has said it’s implemented “comprehensive reforms” with more oversight and employee training to make sure such wrongdoing “can’t happen again.”

The five-person state commerce commission has until December to decide whether the hike is justified.

Regulators at that agency have a full plate this year after massive increase requests from Nicor and Peoples Gas, which is seeking its own all-time high rate hike of $402 million. Chicago customers could be shelling out an average of $18.55 more per month on energy bills next year if the Peoples and ComEd increases are approved.

CUB is challenging the Peoples rate hike as well.