Chicago reaches tentative deal with ComEd on city electric service, City Council members say

Besides a franchise agreement to continue operating the city’s electric grid, there’s also an “Energy and Equity Agreement” that sets economic impact objectives ComEd and the city will pursue together.

SHARE Chicago reaches tentative deal with ComEd on city electric service, City Council members say
ComEd workers repair a damaged power line.

Chicago City Council members are being briefed on a new deal between ComEd and the city to provide electric service to Chicago residents.

Provided

Mayor Lori Lightfoot is pushing for a quick vote on a proposed, 15-year franchise agreement with Commonwealth Edison that preserves the city’s right to “municipalize” after five years, but a skeptical City Council could pull the plug.

Several alderpersons came away from Monday’s virtual briefings claiming the agreement is too long, includes too few consumer concessions and that a final decision on whether to re-up with the company at the center of the $1.3 million bribery scandal still swirling around indicted former Illinois House Speaker Michael Madigan should be left to the newly-elected mayor and City Council — not rushed through in what could be the final months of Lightfoot’s tenure.

“What if it is a really good deal but, timing-wise, people just think it’s an election plug?” said Far North Side Ald. Maria Hadden (49th).

“It’s a really serious thing. If we’re talking about 15 years, we should take some time. It’s been so long already where we’ve heard nothing,” she added. “I hope that we’re really able to take the time to dig into this. If I’m asked to vote on this, I want to be really confident that it’s the best thing that we’re getting for our constituents.”

Hadden pointed to the defensive crouch ComEd has been in since signing a deferred prosecution agreement in the bribery scandal.

“We are in a position to get a lot for our consumers. I don’t have enough information yet from what they’re sharing to know whether they’ve gotten that.”

At a time of rising prices, Hadden said what she wants most in a franchise agreement is “consumer protections for ratepayers,” including an end to residential disconnections.

“We often don’t feel like we have a lot of control or input. Some kind of balance of power is really what I’ll be looking for. Utility companies are big and powerful, so it’s difficult for us as consumers to feel like we have a real voice. But figuring out some way in this franchise agreement to have those checks and balances — including the corruption piece and what are the ethics reforms — is something that I’ll be looking for,” she said.

Ald. Matt Martin (47th) said he, for one, has “a lot of questions and some pretty serious reservations” about the agreement.

“A 15-to-20-year duration is much, much too long. City Council members and environmental advocates and experts have consistently been asking for a five-year duration for a number of reasons. One is that we’re next year going to get into the ComEd corruption trial and it’s very possible that we’ll learn additional information there that may affect our view of ComEd as being a steward of our electrical grid,” Martin said.

Martin pointed to increasing demand as the city moves to electrify its vehicle fleet along with the mayor’s impending plan to decarbonize large new buildings in Chicago.

“We are poised to see significant changes in environmental protection, sustainability and the demand on our electric grid. Knowing that there’s so much change to happen over such a short period of time, Council is in favor of a shorter agreement,” he said.

Martin said the city “lost a lot of leverage” with the scandal-scarred company by releasing a consultant’s report strongly recommending against municipalization.

That makes a clause allowing the city to opt out within five years superfluous, he said.

“Unless and until the city articulates what steps it plans to take in order to make that a reality, it’s not something that we can do at the flip of a switch. So I’m not sure that is especially meaningful at this point,” he said.

The nonprofit that would be created to receive and disperse ComEd funds is another “real concern,” Martin said. Alderpersons were told none of the five city appointees can be city officials or employees.

“The idea that we would give it to unaccountable individuals to distribute as they see fit seems absolutely improper to me,” Martin said.

“We don’t even have a Department of Environment yet. Why are we rushing to create an unaccountable nonprofit when we are still in the process of standing up city entities that will be the lead drivers for us meeting a very, very ambitious Climate Action Plan?”

Former mayoral challenger Ald. Ray Lopez (15th), one of the mayor’s most outspoken Council critics, noted Chicago has already waited three-and-a-half years for a new franchise agreement.

“Waiting three more months won’t kill us,” Lopez said. “Clearly, this is a political stunt by this mayor trying to grab headlines for political purposes. She’s trying to enter the city into an agreement that will last 20 years and create a new nonprofit responsible to no one with power to dole out $120 million. This ordinance and those decisions should be held for the next administration.”

Lightfoot plans to introduce the agreement at Wednesday’s City Council meeting and push for a final vote in March, Council members said.

During a series of virtual briefings Monday, Council members were told the administration has actually reached two “companion agreements” with Commonwealth Edison.

The first is a franchise agreement giving the company “the right to provide electricity and use the public way” which “preserves the city’s ability to municipalize after the first five years” of the 15-year agreement, which has an optional 5-year extension. The Lightfoot administration billed it as the “strongest municipal utility franchise deal in the country.”

The second is a so-called “Energy and Equity Agreement” setting economic impact objectives ComEd and the city will pursue together. That includes a goal of reducing carbon emissions 62% percent by 2040, as proposed in the city’s Climate Action Plan.

A presentation to Council members outlined the terms. Among them:

• $520 million for hundreds of energy and equity community benefit projects.

• 4,000 new rooftop solar projects for low-income residents, and one new community solar site.

• 400-plus solar education workshops for residents and businesses.

• Thousands of residents to receive affordable broadband from internet service providers using ComEd dark fiber.

• New West Side Clean Energy Training Hub and $3.2 million investment for Chicago Builds, a Chicago Public Schools construction training program.

• 10,000 residents to be trained for careers at ComEd or other companies supporting the clean energy transition.

• At least 1,000 South and West Side residents will be hired for new construction worker/overhead helper and customer service roles.

• At least 100 energy assistance ambassadors will help their neighbors find assistance that’s available for paying their electric bills.

A slide from the presentation described even more benefits of the two agreements, such as creating a “third-party non-profit board” to administer the energy and equity funds and a new advisory panel to shape the program and oversee progress.

There was also talk about creating a “Coordination Council to streamline governance and operations,” including those with the city’s infrastructure departments.

Neither the mayor’s office nor ComEd would confirm or deny a deal.

“Productive discussions have continued between the City and ComEd to arrive at an agreement,” according to a city statement, while ComEd issued a statement that the utility “remains closely engaged with the City of Chicago to arrive at an agreement.”

Contributing: Brett Chase

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