Press Release: Feb 20, 2006 (9:05 am)


Calls on Citizens Utility Board to Rise Above Political Posturing

CHICAGO (Feb. 20, 2006) – Consumers Organized for Reliable Electricity (CORE) today criticized as political posturing the introduction of legislation that could force utilities in Illinois into bankruptcy and create the risk of a California style energy crisis.

A 1997 law, as amended, reduced consumer rates by up to 20 percent and froze them for nearly a decade. On Jan. 24, 2006, the Illinois Commerce Commission (ICC) unanimously approved a mechanism, the Illinois Auction, by which Illinois utility companies would buy power on the open market at the lowest possible price. Under this plan, multiple companies will be required to compete to sell power to the utilities. The competitive nature of the plan will ensure that utilities are able to secure the lowest available market rate, which will then be passed directly to consumers. 

The legislation being pushed by the Citizens Utility Board (CUB) would extend the current rate freeze for three years while failing to address how utilities are supposed to pay for the power they need to deliver to their customers. Because utilities must purchase power at market rates, if they are forced to then sell power for less, the utilities will rapidly move toward bankruptcy. A utility consistently losing money will simply be unable to invest in infrastructure to ensure reliable service.

“This is not a sound policy proposal. While it may score political points, it makes no sense for Illinois’ electric consumers,” said Avis LaVelle, CORE media liaison. “For the same reason that a car dealership can’t buy a car for $10,000 and sell the same car the next day for $5,000, utilities simply won’t be able to survive and consumers will pay the price.  Sound long-term energy policy decisions are too important to be left to politics. The ICC has spoken unanimously, and that decision should be endorsed, not pushed aside.” 

In California, non-experts were allowed to gain control over the state’s electric affairs, and disaster soon followed. Major utilities were restricted from recovering their costs and were ultimately forced into bankruptcy. Rolling blackouts kept residential consumers in the dark, and taxpayers were forced to spend billions of dollars to clean up the mess.

“We’ve seen the result of irresponsible electricity policy in California – it was a disaster,” said LaVelle. “Absent political pressures, there is broad consensus that Illinois should continue to move toward open energy markets. It’s important that the General Assembly allow the process to move forward unimpeded.”

CORE is a coalition of business, labor, community and energy groups that support the preservation of reliable electricity, the transition of the industry to competition and energy decisions made by the experts at the Illinois Commerce Commission. CORE’s Advisory Committee members represent more than 100,000 businesses and more than 1 million individuals across Illinois.

For more information, visit the CORE Web site at www.illinoiscore.org.

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For more information:

Media Liaison
Avis LaVelle
312-223-0581