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home : insight & opinion : guest columns
June 16, 2019

5/31/2007 11:20:00 AM
Guest column
Power-rate 'relief' doesn't fix the larger problem
For the Daily News

It has now been almost five months since Ameren and Commonwealth Edison customers saw their electric rates spike in January. In Springfield, this issue has been the subject of much discussion and heated debate, but very little action. While members of both parties have pushed for rate relief in varying forms, the state's leaders have thus far refused to work together to allow for any solution.

Since last fall when the results of the Illinois Commerce Commission's reverse auction were announced, I have believed working families needed protection from such dramatic rate hikes. That's why I supported Senate Bill 1592, which would have reversed the recent electric-rate increase and provided relief to Ameren and ComEd customers. While I question the feasibility of a long term extension of the rate freeze, it has become clear that the threat of extending the rate freeze is the most effective tool in bringing the utilities to the negotiating table.

While SB 1592 and other legislative attempts have been stalled by House Speaker Michael Madigan (D-Chicago) and Senate President Emil Jones (D-Chicago), negotiations between lawmakers and the power companies are progressing. Ameren and ComEd tentatively offered about $500 million in rate relief to be spread over the next three years. While this amount is much higher than the relief the utilities were initially willing to offer, it is still insufficient. Let's remember that Ameren saw a 76 percent jump in its profits in the first three months of this year, in part because of the electric rate increase on consumers.

A lump-sum payment such as this is neither the best solution nor the one that addresses this issue over the long term. This situation is not unlike a sinking boat; using a bucket to bail out water will work for a while, but in the end the boat will sink unless an effort is made to fix the leak. Likewise, a massive cash payment from utility companies may help consumers over the short term, but shortly thereafter their rates will skyrocket once again.

In the end, our plan should address two issues: First, immediate and meaningful relief for ratepayers. As mentioned above, a long-term extension of the rate freeze is likely not feasible, but phasing in necessary rate increases over a multi-year period would allow for both rate relief and predictability in the coming years.

Second, a decision must be made on what our state will do to procure power in the coming years. Another reverse auction is scheduled for next year. Clearly the 2006 auction did not achieve its intended goal of buying electricity from generators at the lowest possible price. Based on the failure of the auction held last year, we need to change direction. Whether that means substantial changes in the manner in which the auction is conducted or devising an entirely new system of procurement, these decisions must be discussed, and decided soon.

Just as bailing a bucket of water out of a sinking ship won't work for very long, a lump-sum cash payout will not protect consumers from seeing electric rates devastate their household budgets in the coming years. Let's come up with a long-term plan that fixes the problem instead of pushing it off for another day.

Sen. Dale Righter (R-Charleston) represents the 55th District in the Illinois Senate.

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