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Will Smart Grid Rate Hikes Rise from the Dead?

October 25, 2011

SPRINGFIELD, Ill. - During this week's veto session of the state legislature, Illinois lawmakers are being asked to override Governor Pat Quinn's veto of the "smart grid" legislation. It would pay to upgrade the state's electrical system through automatic rate hikes.

Consumer groups don't like the idea of guaranteeing higher electric bills through legislation, and Paul Gaynor, chief of the Public Interest Division at the Illinois Attorney General's Office, says the bill usurps the normal regulatory process.

Gaynor says power companies ComEd and Ameren don't need a new law. He points out that they can ask for approval to modernize the system from the Illinois Commerce Commission by proposing a traditional rate case.

"If these improvements need to be made and they're reasonable and prudent, the commission will approve it."

AARP recently polled 800 Illinois voters and found that seven in 10 oppose annual rate hikes even if they would improve the system. Commonwealth Edison calls the poll "slanted" and says an upgrade would create jobs. That power company has issued its own poll, showing that 76 percent are in favor of upgrading the grid.

ComEd officials say the legislation would guarantee Illinoisans reliable electrical service. Gaynor sees it differently.

"What they're trying to do in Springfield is guarantee double-digit profits. And those profits would be guaranteed based upon automatic annual rate increases of in the neighborhood of nine percent, year in, year out."

Scott Musser, associate state director for AARP Illinois, doesn't care for the law either.

"Most parties agree that we want a reliable electric system in Illinois, but this bill is certainly not the way you go about doing it."

The Better Government Association has reported that ComEd and Ameren, their executives and affiliates, gave more than $1.3 million to state lawmakers in the months before the smart grid vote.

Mary Anne Meyers, Public News Service - IL