AG says state should reject ComEd’s $500M offer
May 6, 2010
Says consumers will pay higher rates under the plan
SPRINGFIELD — Attorney General Lisa Madigan today came out against Commonwealth Edison’s $500 million offer to the state in exchange for allowing the utility to lock in higher electricity rates and receive a guaranteed profit of 10 percent.
“It is my job to protect utility customers from excessive rates. I will not support any proposal that forces ratepayers to pay more than they should for electricity,” Madigan said in a statement released by her office.
“This is just another effort to lock in unjustified profits. I strongly oppose allowing ComEd to use the state’s financial crisis to try to increase their profits by asking ratepayers to pick up the tab,” the attorney general said.
One Wall Street analyst who spoke with the Sun-Times believes ComEd would derive a roughly $4 billion windfall if the state were to accept its offer of upfront cash in exchange for locking in above-market electricity rates during the next four years.
House and Senate Democrats, who are crafting a new budget heavily reliant on borrowing, have not shown a willingness to accept ComEd’s 11th-hour offer as a Friday adjournment deadline creeps closer.
The attorney general’s stance gives key legislative Democrats plenty of cover to simply dismiss the utility’s high-stakes offer as a bad deal for consumers.
Sen. Donne Trotter (D-Chicago), the Senate Democrats’ top budget negotiator, said there was “not a lot of love” expressed toward the ComEd plan during a morning leadership meeting within his caucus.
And a top aide to House Speaker Michael Madigan (D-Chicago), father of the attorney general, gave no signs of support for ComEd’s plan, which was still being dissected.
“I’ll call it under review for now,” said the speaker’s spokesman, Steve Brown.
Enticing as it seems for a state budget mired in red ink, the Citizens Utility Board is concerned that ComEd’s $500 million offer could lock in higher electricity rates for consumers.
Not all politicans balked at the proposal. Mayor Daley called the utility’s unprecedented offer a “good concept.
“The state needs money. Everybody needs infrastructure money. They have to update all of their electrical lines. And the faster you do this, the better off it is for the environment,’’ the mayor said.
Contributing: Fran Spielman