CHICAGO — At the end of a 10-year rate freeze in Illinois, electric rates are projected to increase between 22 percent and 55 percent statewide. Customers, especially in southern Illinois, have already seen their bills double and triple.
Jumping into action, consumer groups are lobbying for a new rate freeze that would give customers an immediate break. But the utility conglomerates, Ameren and Commonwealth Edison, are organizing too, eager to see their already bloated profit margin grow further.
Exelon Corp., ComEd’s corporate parent, reported $691 million in profits for the first quarter of 2007, a 73 percent increase over the previous period, in part because of higher charges to consumers. Exelon is the largest operator of nuclear plants in the country, with 11 reactors in Illinois and six on the East Coast.
Jim Chilsen, spokesman for Citizens Utility Board (CUB), a Chicago-based consumer advocacy group, told the World the current structure of pricing power is deeply flawed and unhealthy.
“Right now we have a policy that simply favors the power companies,” said Chilsen.
“Why should Illinois consumers have to pay these ridiculous rates?” he asked. “We want to stop that and that’s why we are fighting for a rate freeze.”
Chilsen said the two major power companies in Illinois launched a new way of pricing power called the “reverse auction system,” which has led to energy rate hikes anywhere from 26 percent to 300 percent.
“We’re heading into the summer when people need to turn on their air conditioners,” said Chilsen. “Too many people are going to have to choose between cooling their homes or buying their medication.”
Chilsen said that CUB, other consumer advocacy groups and scores of elected officials are pushing for a rate rollback and a freeze as a short-term goal. “It’s the most responsible thing to do,” he said.
Bob Vondrasek, executive director of the South Austin Community Coalition in Chicago, agrees with Chilsen. Vondrasek told the World that since the Reagan years there has been a gutting of government regulation of public utilities, including measures that control prices.
Buying and selling electricity, Vondrasek said, should not be treated as simply a business, “because it’s a public utility.”
But essential services like electricity, he said, “are at the whim of the producers and they have us over a barrel, so to speak.”
Recently, state Senate President Emil Jones (D-Chicago) was given tens of thousands of signatures of citizens supporting the rate freeze. Jones, a longtime ally of ComEd, opposes the freeze and argues utility companies have a right to recover their costs after the previous 10-year rate freeze.
In a parliamentary maneuver, Jones removed ComEd from the rate freeze in the Senate bill, while Ameren remained. The bill calls for a rollback to 2006 electric levels for a year and is now in the state House.
The House Electric Utility Oversight Committee has now added ComEd back into the bill. Debate on the issue continues to heat up in the Legislature while House and Senate leaders meet to resolve the matter.
Busloads of people from all over Illinois went to Springfield, the state capital, this week to urge lawmakers to pass the rate freeze and come up with a long-term solution.
Overall, Chilsen suggests, “We need to come up with a better system of pricing power, a long-term solution on pricing electricity — and not on the backs of consumers” who are already trying to make ends meet.
“The people are angry, fired up and frustrated and are fighting back, not letting anyone forget this is an unfair system,” said Chilsen. “They are the ones keeping this movement alive.”