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ComEd to delay smart meters, appeal ICC rate ruling

Updated: December 11, 2012 2:02AM



ComEd said it will delay key elements of its grid modernization program and appeal a ruling by the ICC that shrank a rate cut but not enough to satisfy the utility.

Meanwhile, customers will see an increase of 57 cents a month on average starting at the end of October, because of the Illinois Commerce Commission ruling made last week, ComEd said.

“With this ruling, we have no choice but to delay some elements of the grid modernization rollout, at least until we have an outcome in the courts,” said Anne Pramaggiore, Commonwealth Edison president and CEO. “The adverse rulings on the interest rate and rate base issues significantly impair ComEd’s ability to finance long-term investment programs.”

ComEd said it will delay installation of additional smart meters until 2015 and some basic infrastructure programs, and the Chicago training center will either be delayed or phased in more gradually.

“The result is that more than $2.3 billion in customer savings and creation of 2,000 full-time equivalent jobs will be delayed,” ComEd said.

The smart meters to start being installed in 2013. About 130,000 smart meters already installed on the West Side and west suburbs will continue operating as part of an ongoing pilot program.

A training center set for groundbreaking in 2013 is being delayed indefinitely, Judy Radner said.

The Illinois Commerce Commission last week gave ComEd a mixed decision on recovering the cost of ComEd’s smart-grid infrastructure project. The ICC allowed ComEd’s way of figuring its pension assets, but denied both interest rate costs and rate base that ComEd wanted to recover the costs of the project.

ComEd had proposed a decrease in its electricity rates totaling $40 million to $50 million, but the ICC decided May 29 to cut customers’ rates by four times that, for a total of $168.6 million. The cuts took effect this summer.

The ICC shrank the rate cut 21 percent to $133 million. The rate dispute centered on how ComEd wanted to calculate interest on debt, pensions and assets.

The issue drew 3,000 comments and letters to the ICC, as well as requests from contractors and elected officials for ComEd to recoup its full costs.

The ICC, on 3-2 votes, rejected ComEd’s requests to reverse its previous positions on two interest-rate issues that would have meant greater revenue for the utility and higher rates for customers.

Those two issues involve how to calculate interest rates. The first involved whether ComEd should use a year-end, all-inclusive rate base number or a weighted average taking into account the difference between this year and 2013. The second issue involved whether ComEd should use short-term or long-term calculations for the interest rate. The Commission ruled in favor of the short-term interest rate calculation.

ICC member Erin O’Connell-Diaz, who dissented, said she thought the Illinois Legislature was clear in allowing ComEd to fully recover its costs.

“It’s very important that Illinois maintain the lead in smart meter technology,” she said. “I don’t want Illinois to be in the back of the pack.”

The ICC previously approved a rate that ComEd claimed was inadequate. In part, the ICC ruled that the electric utility can’t earn a rate of return on a pension asset that isn’t fully funded.

The conflict has prolonged a campaign ComEd waged last year for its $2.6 billion plan to upgrade its electric grid over 10 years. Its plan calls for upgrading substations to allow faster responses to power outages, installing digital “smart” meters to let people save money by changing when and how they use electricity and hiring more women- and minority-owned companies to help with the work.

At the end of August, 21 percent of ComEd’s residential customers, or 712,634, chose an electricity supplier other than ComEd, according to the latest report from the ICC.

That was a 35 percent increase from July’s 527,116 such customers, according to the report.

In ComEd’s service territory, 30 suppliers offer residential electricity service on terms they tout as cheaper and that provide greater choices of power generated by so-called “green” energy such as solar and wind power.

The competitive suppliers’ offers can be compared to ComEd’s prices at the “Price to Compare” section of PlugInIllinois.org.

ComEd has maintained that it doesn’t compete with the 30 companies and advocates customers choosing their own electricity supplier.

ComEd doesn’t make a profit selling residential electricity. It passes along the cost it pays for power, but bills for delivering electricity to people’s homes. Thanks to a 2007 law passed by the Illinois General Assembly, alternative suppliers are able to piggyback onto ComEd bills instead of having to send out separate bills



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