True or False?

Illinois consumers have not seen a rate increase since 1995.

True:

The last time that the Illinois Commerce Commission (ICC) raised electricity rates was in 1995. In 1997, the General Assembly passed a law to restructure the electricity industry in Illinois. The new law cut rates up to 20 percent and the rates will remain frozen until 2007.

True or False?

Illinois utilities can continue to supply reliable service to electricity consumers at pre-1995 rates for the foreseeable future.

False:

In January 2007, utilities will be forced to buy electricity on the open market. Additionally, after a decade of holding costs in place, the utilities will have to account for maintaining reliability going forward, increased electricity usage (computers, video games, cordless phones, etc.) and growth in the region that requires new infrastructure. Electricity rates will have to adjust for the new reality.

True or False?
There is no danger of rolling blackouts – or any other problems that occurred in California – happening in Illinois.

False:

California’s energy crisis was due in part to an artificial rate cap imposed by the legislature. The rate cap limited the amount that utilities could charge for electricity, regardless of the true price that utilities had to pay to purchase energy. Utilities were forced to buy high and sell low on an unstable spot market. In a matter of months, California electricity providers were in a financial crisis, causing local utilities to go bankrupt. In the end, California faced rolling blackouts and a statewide energy shortage, problems that taxpayers had to pay to fix.

The Citizens Utility Board (CUB) has acknowledged the possibility of a California-style electric crisis in the past. 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.”

Yet, now CUB has attacked CORE for educating consumers about the possibility of a California-style electric crisis.

True or False?
As long as Exelon, ComEd’s parent company, continues to thrive economically, they can subsidize ComEd losses.

False:

As the ICC’s Administrative Law Judge said in the ComEd procurement case, it is inconsistent with federal law for a generating affiliate to supply electricity at below market rates. In other words, it would be illegal for Exelon to subsidize ComEd.

True or False?
The Illinois Auction is a radical departure from Illinois law that would dramatically limit the state’s oversight of electric utilities and the rates consumers pay.

False:

Interestingly, CUB was part of the ICC stakeholder process. During this period, the Post-2006 Initiative Procurement Working Group (PWG) met 14 times for a total of more than 52 hours “in the discussion of the various strategies for procuring power following the current transition,” according to the cover letter of the “Final Report to the Illinois Commerce Commission presented by the Procurement Working Group” dated Sept. 23, 2004.

According to the PWG – of which CUB was a participant – the group agreed that any procurement process adopted through legislative fiat or by Commission rule should include, to the extent possible, the attributes enumerated in its report. Moreover, in its cover letter of its final report to the ICC, the group suggested that it was providing a “good faith consensus road map for policy makers to consider when making the final decisions on energy procurement policy in the Post 2006 era.” Yet now CUB is attacking the competitive bidding process.

True or False?
CUB has consistently opposed electricity restructuring in Illinois.

False:

Lately, CUB has begun to argue that the restructuring law that passed the General Assembly in 1997 has not worked. A CUB spokesman was recently quoted as saying, “The idea behind the 10-year process was to give the Illinois market time to develop. Our complaint is that it hasn't.” However, just three years ago, CUB took a rather different view of the situation. In their quarterly newsletter, CUB said, “With total savings of more than $600 million a year, the rate cuts ensured that residential consumers would benefit from deregulation even if a competitive market did not materialize.” Just one year earlier, in the same newsletter, CUB said, “Other states are restructuring their electric industries, but nowhere are consumers saving as much money as in Illinois.”

True or False?

CUB has never supported a competitive procurement process for Illinois utilities.

False:

Contradicting what CUB says today, CUB previously supported the foundations of a competitive bidding process. During the legislative debate over industry restructuring in 1997, CUB proposed a plan that required electric utilities to “shop for the cheapest power available on the wholesale market.” In 1996, CUB criticized ComEd for attempting to enter into a long-term agreement to purchase wholesale electricity from two power plants, “even if there is less expensive electricity available on the wholesale market.”

Additionally, CUB has described the move to competitive as inevitable. In 2001, CUB said, “Those (residential customers) who stay with their local utilities will have electric rates frozen until 2005, after which the utilities’ rates will become subject to market forces.” In fact, even as late as March 2005, CUB said, “we do not oppose the idea of an auction as a competitive procurement mechanism…”