Press Release: Sep 28, 2006 (1:49 pm)


Coalition Opposes Rate Freeze Legislation

CHICAGO – Consumers Organized for Reliable Electricity (CORE) leaders, at a news conference today, stressed that Illinois is on the right track and that electric restructuring is working. Following a decade-long rate freeze, electric rates in 2007 will be lower in northern Illinois than they were in 1995.

The successful Illinois Auction was highly competitive, resulting in the state’s utilities purchasing electricity at the lowest possible price. But the Citizens Utility Board (CUB) is currently pushing legislation that would freeze electricity rates at artificially low levels, while abandoning an exhaustive regulatory and legal process that already has taken place and thereby threatening Illinois’ electric reliability.

“The auction generated market rate prices that are lower than similarly-sized cities around the country and lower than rates charged in northern Illinois in 1995. Plain and simple, the Illinois Auction worked,” said David J. Vite, president and CEO of the Illinois Retail Merchants Association and a member of CORE’s Advisory Committee. “This was a good, competitive process, and it led to the best possible result.”

The process included the ICC staff report following the seven-month Procurement Working Group, which CUB participated in, a four-month Federal Energy Regulatory Commission proceeding and an 11-month Illinois Commerce Commission proceeding. As a result of that process, the ICC unanimously approved the Illinois Auction as a mechanism for utilities in Illinois to purchase power on the open market. Last week the ICC approved the auction’s results.

Because the Illinois Auction worked, Illinois residents will be ensured that electricity will remain affordable and reliable.

If CUB’s proposal is made law, the results of the recent Illinois Auction would be ignored. Without the results in place, utilities in Illinois will be forced to purchase power on the volatile “spot” market. As a consequence, utilities in Illinois will face bankruptcy and consumers will be left to foot the bill.

“Don’t take it from me – you can use CUB’s own statements to make the point,” said Greg Baise, president and CEO of the Illinois Manufacturers’ Association and a member of CORE’s Advisory Committee. “In a 2001 newsletter, CUB said, ‘California’s deregulation law made this problem much worse by requiring utilities to buy all the power for their customers in the volatile “spot” market. With electric rates temporarily capped, the result has been a financial disaster for the utilities and customers eventually could get stuck with the tab.’ CUB is now proposing the very policy they once highlighted as dangerous.”

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 ICC. CORE’s Advisory Committee members represent more than 100,000 businesses and more than 1 million individuals statewide.

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

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Media Liaison
Avis LaVelle
312-223-0581