Press Release: Oct 3, 2005 (7:35 am)


CORE Ads Caution Against Failed California Approach

CHICAGO – Oct. 3, 2005 -- The possibility of a California-style energy crisis developing in Illinois is one step closer to becoming a reality. On Friday, Oct. 1, the highly respected Moody’s Investors Service placed Ameren and Commonwealth Edison (ComEd) under review for a possible credit downgrade because of recent actions by Illinois Gov. Rod Blagojevich.

“This rating action reflects an increasingly contentious political and regulatory environment in Illinois at a time when Ameren’s three operating utilities in the state are seeking to implement a transitional plan for power procurement,” Moody’s wrote, and noting separately, when: “…ComEd is seeking to implement a transition plan for power procurement and seeking recovery of investments in its electricity distribution network.”

Such a downgrade would result in higher energy prices for consumers. A lowered credit rating would force Ameren and ComEd to pay higher prices for energy and other products with those costs – in turn – being passed on to consumers.

Moody’s again referenced Gov. Blagojevich’s actions by stating: “The Governor last week took the highly unusual step of removing the Chairman of the Illinois Commerce Commission in order to name a candidate who was head of the largest state consumer advocate group, which has previously filed testimony in opposition of the utility’s procurement plan.”

“Illinois’ electric industry is in an unnecessarily troubled state of affairs that threatens the state’s economy and every citizen,” said Doug Whitley, President and CEO of the Illinois State Chamber of Commerce and a member of CORE. “Policymakers need to understand that their actions have real consequences for business and consumers alike.”

“We believe that sound energy policy rather than soundbites should prevail in the current debate,” said David Vite, President and CEO of the Illinois Retail Merchants Association and a member of CORE. “It is important to have a consistent, reliable energy policy if the economy and jobs are going to grow. Uncertainty is the enemy of reliable and reasonably priced energy.”

Moody’s noted that Ameren and ComEd are operating under a rate freeze, which is scheduled to expire at the end of 2006. Moody’s pointed out that ComEd owns no power generation assets. Since its current generation contracts expire at the end of 2006, the company needs some way to buy energy beginning in 2007.

Most of the key players in Illinois’ energy industry – as well as the staff of the Illinois Commerce Commission (ICC) support a competitive bidding process as the best way for Ameren and ComEd to buy energy. Under this process, multiple companies would compete to sell power to Ameren and ComEd at the lowest possible price.

Gov. Blagojevich opposes the competitive bidding process but has offered no alternative plan. As a result, how Ameren and ComEd will procure power in 2007 remains unclear.

Consumers Organized for Reliable Electricity (CORE) has called on Gov. Blagojevich and other Illinois lawmakers to let the ICC do its job of determining the best way for Illinois electric utilities to buy energy beginning in 2007.

A downgrade would raise the utility’s costs, make it more difficult to borrow, undermine the company’s financial stability, and potentially harm shareholders, retirees, employees and electricity customers.

“It would help, “Whitley said, “if our politicians would pay as much attention to Reuters as they do the Capitol Fax.”

In other news, CORE announced today that – as part of its ongoing public education efforts – it has launched a paid advertising campaign. The campaign will focus on the California energy crisis and make the point that some Illinois policymakers are taking similar steps, which could put reliable energy at risk. These Illinois policymakers are politicizing a process that should be left to the experts at the Illinois Commerce Commission. The television ad can be viewed at www.illinoiscore.org.

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.

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For more information:

Media Liaison
Avis LaVelle
312-223-0581