Give deregulation a chance to bring power to the people

Chicago Sun-Times
March 5, 2007
Editorial

No one is happy about the big boost in electricity bills that started this year as a by-product of deregulation, but the loudest complaints are coming from Downstate areas served by Ameren. Its customers were told to expect increases of more than 50 percent -- or more than twice the 22 percent average increase that ComEd predicted for the Chicago area. But lawmakers Downstate are getting an earful from power customers who were whacked with increases that are far, far higher than predicted.

Part of the problem is that the rate increase started during a particularly cold winter, so people who heat their homes with electricity are getting hit with a double-whammy. But there are also indications that Ameren did a poor job of warning its customers not only about the rate increase but also about the end of discounts it had been providing to woo customers to switch to electric heat. Ameren CEO Scott Cisel admitted as much during a hearing before the Illinois House last week.

By contrast, ComEd has been the source of comparatively few complaints. That could change in the summer, when air conditioners start drawing power, but for now it looks like the company did a better job preparing its customers for the increase in bills. Ameren responded to the controversy by proposing a $35 million plan to provide some relief to its shocked customers, particularly all-electric customers. That did little to placate lawmakers. House members seem gung-ho on a plan to roll back the increases and force ComEd and Ameren to pay back the extra money they've collected so far this year.

But the Senate seems more committed to the deregulation process. ComEd rates were rolled back 20 percent beginning in 1997 and frozen for nearly a decade as part of the plan. ComEd and Ameren spun off their power-generating capacity and became distribution-only companies. The idea was for competing power companies to enter the market in the interim. When that didn't happen, the Illinois Commerce Commission held a "reverse auction" in which several entities bid to supply power needs in Chicago and Downstate. That auction produced the increases we are now paying.

We have advocated sticking with the process to see if the higher rates now will draw competition into the Illinois market. And we don't think ComEd should be punished for Ameren's sins. ComEd and Ameren say they could become insolvent if the increases are repealed and they are forced to buy electricity for more than they can sell it. We haven't changed our position, at least as regarding ComEd. On the other hand, it's hard to find fault with the comment from "poor working stiff" on a Bloomington newspaper's Web site, who said, "all I know is, we consumers better not hear of any Ameren executive getting a bonus this year."

« see more