The NewStandard ceased publishing on April 27, 2007.

Illinois Residents May See Skyrocketing Power Rates

by Brendan Coyne

Dec. 5, 2005 – With bitter cold and snow already hitting the Midwest, Illinois citizen and consumer groups are already looking toward next year and redoubling efforts to sink electricity-buying proposals that could cause energy prices to jump at least 37 percent by 2007. The proposals, one for a state energy-market auction and two for state and federally sanctioned rate hikes, come about seven years after the state opted to enter the energy deregulation frenzy of the late 1990s.

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In joining the rush of energy-market deregulation, Illinois placed a ten-year moratorium on raising the retail price of energy on state utilities. Now, little more than a year before the end of the caps, energy companies Commonwealth Edison (ComEd) and Ameren are pushing proposals that would raise cumulative residential electricity prices by nearly $1 billion, according to the Illinois Citizens Utility Board and a coalition of groups representing labor, seniors, consumers and communities, which together publish the website StopComEdRateHike.org.

Groups opposing the proposed energy purchasing scheme and rate hikes maintain that ComEd and the other energy firms have fared well under the cap. They warn that raising rates by 37 percent or more could open the state up to "market gaming" reminiscent of Enron’s swindling of California. ComEd parent Exelon made $1.9 billion in 2004, and its stock has steadily risen to one-and-a-half times what it was in 2000.

"ComEd has used some of those ample earnings to bankroll a massive television and radio advertising assault that falsely claims Illinois will suffer recurring blackouts and other symptoms of a California-style energy crisis if the utility isn't awarded a dramatic rate hike," the coalition said in a statement announcing its formation last month. "Left out of the advertisements is any acknowledgement that the [California] crisis was caused when companies like Enron manipulated the physical flows of power on purpose to artificially raise prices and steal billions of dollars from consumers through tricks like purposefully withholding power so it couldn't be delivered."

Ameren, too, has experienced growing profits. According to a recent company report, the business made nearly $50 million more in the third quarter of 2005 than it did during the same period a year ago. Its net income after nine months was $140 million more than the same period in 2004.

Today, the Citizens Utility Board and coalition members launched a series of new ads aimed at highlighting what they termed "the utility’s blitz of misleading commercials." The groups note that the rate hike will mean an average per-household jump of $275 a year.

Any change in statewide rates has to be approved by the Illinois Commerce Commission, which is expected to make a decision on the auction and rate increase soon. The fate of a separate effort by Northern Illinois power grid operator PJM to gain federal energy regulators approval for an additional price bump is expected to be decided within six months, CUB said in a statement denouncing the whole plan.

"These three rate hike proposals add up to the largest fleecing of consumers we’ve ever seen in Illinois," CUB head David Kolata said. In addition, Kolata charged, the energy industry is hypocritical because it claims to favor free markets, "but when the market starts to generate lower prices – as the capacity market has – the company sings a different tune and asks federal regulators to step in and approve a big rate increase."

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The NewStandard ceased publishing on April 27, 2007.


Brendan Coyne is a contributing journalist.

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