Progress' made on utility rates – Lawmakers express hope two sides are
near resolution

Peoria Journal Star
by Adriana Colindres of Gatehouse News Service
Friday, June 15, 2007

SPRINGFIELD – After meeting privately for about three hours Thursday to discuss Illinois' problem with soaring electricity rates, top utility company executives and Democratic legislative leaders said little other than that they made "substantial progress."

The sketchy description nonetheless caused some lawmakers and others who have closely monitored the electricity issue to express guarded optimism that a resolution is just around the corner.

"I think there was enough progress made that there's the possibility of an end in sight," said Sen. Dale Risinger, a Peoria Republican who is his party's spokesman on the Senate Environment and Energy Committee. He was not invited to the meeting.

The negotiating session took place in Senate President Emil Jones' state Capitol office and included Jones, House Speaker Michael Madigan, Exelon Corp. chief executive officer John Rowe, Commonwealth Edison president Frank Clark, Ameren Corp. CEO Gary Rainwater and Ameren Illinois president Scott Cisel.

Exelon is the parent company of Chicago-based ComEd, while Ameren is the parent company of AmerenCILCO, AmerenCIPS and AmerenIP. ComEd and the Ameren Illinois companies provide electricity to most people in the state.

Electric rates have been a top legislative issue this year, but lawmakers so far have disagreed about the best way to ease the financial burden on consumers.

Various proposals would roll back rates to their 2006 levels and freeze them, impose a tax on power-generating companies and create a new entity to oversee power-purchasing in Illinois. Some lawmakers, especially those from downstate, have said the electricity problem must be fixed before the General Assembly passes a budget for the fiscal year that starts July 1.

Beginning in January, the cost of electricity rose dramatically for Ameren and ComEd customers because of the expiration of a long-standing rate freeze that was part of the state's 1997 deregulation law.

"I will simply tell you that we made substantial progress. There's still a great deal of work to be done," Madigan said after the meeting ended.

"I cannot add to what the speaker said," Rowe said.

Cisel, like the others, used the phrase "substantial progress" in describing the meeting.

"We just had a lot of fruitful discussion, and that's my assessment of what took place," he added.

Madigan, Jones, Rowe and Cisel would not reveal any specifics.

Seeking to avoid a rate-freeze law that the utility companies say they would fight in court, Ameren and ComEd in May offered a $500 million rate-relief package that would target customers hardest hit by electric rate increases.

But lawmakers said that figure is too low. They want $1 billion or more in rate relief, as well as a better and cheaper way for Illinois to buy electricity on a long-term basis.

Sen. Gary Forby, D-Benton, said when he sat in on negotiations last week, a rate-relief plan worth $1 billion over five years was discussed. He didn't know what figures might have been mentioned Thursday.

David Kolata, who heads the Citizens Utility Board, also wasn't at Thursday's meeting, but he was encouraged by the descriptions he has heard from others.

"We're hopeful that a deal will be reached within the next week or so," he said.

Meanwhile, budget negotiations took a back seat to electric rate negotiations Thursday.

Gov. Rod Blagojevich and the four legislative leaders were scheduled to meet Thursday morning to discuss a property tax assessment program unique to Cook County. Jones and Madigan disagree over a bill to continue the program and extend some property tax relief to downstate communities.

However, the meeting was canceled because Jones and Madigan were engaged in electric rate negotiations at the same time as the scheduled budget meeting.

No time has been set for the governor and leaders to resume their talks.

Adriana Colindres can be reached at (217) 782-6292 or adriana.colindres@sj-r.com. Doug Finke contributed to this report.

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