1. - Carl Nyberg - Wednesday, Jan 10, 07 @ 9:05 am:

   If the utilities can demonstrate a need then they should get a rate hike to cover that need.

   But the full rate hike is clearly just gouging consumers.

   Of the two plans, I prefer the Madigan plan. ComEd has greased Emil Jones and much of the Black leadership in the state, including Rev. Jesse Jackson.

   The claim that ComEd jacking rates on regular folk, including regular Blacks, because ComEd has done so much for the Black community is self-serving bull.

   ComEd has given money to the Black political class. These people are already living pretty well compared to normal people, including normal Black people.

   The Senate Dems screwing Illinois consumers makes the case for the Green Party having some seats in the legislature strongly. If there were three or four Greens in the Illinois Senate, something tells me they would have embarrassed the Senate Dems into acting like Democrats, instead of legislators for sale to corporate fat cats.




2. - fedup dem - Wednesday, Jan 10, 07 @ 9:05 am:

   The issue should have been decided in a modern-day trial by combat between Madigan and Jones… a log-rolling contest held over a pool full of piranha. You could have televised the spectacle on pay-per-view, with the proceeds used to help balance the state’s budget.

   You might be wondering what would do if they both fell off the log. I guess we could call it a good start.




3. - Fiefdom - Wednesday, Jan 10, 07 @ 9:15 am:

   Emil Jones has the best interests of consumers at heart. A freeze will be a disaster of Californic proprotions resulting with bankrupt utilities and a career ending move for Blago.




4. - the Other Anonymous - Wednesday, Jan 10, 07 @ 9:17 am:

   I’m with Madigan on this one. The electric utilities have been pulling the wool over the eyes of politicians and consumers about deregulation for the past decade or so.

   Probably the biggest lie is implication in the CORE television ads that the California energy crisis was caused by government regulations. In fact, it was the direct result of utilities manipulating deregulation in the cause of ever-higher profits.




5. - Capt. Obvious - Wednesday, Jan 10, 07 @ 9:29 am:

   Sorry Emil, but it is pretty obvious Madigan is on the right track.
   The companies were profitable under the freeze. They could be allowed a small increase but 50+ percent is just the nuts.
   Citing CA energy scandal of 2000 was a mistake becuase energy company honchos went to the joint and paid huge fines.
   The $15 million propaganda campaign really seals the deal here. It their case was so good why not just say it? Why create the astroturf front group? Why use my money to bull*&%^ you and me?




6. - Bill Baar - Wednesday, Jan 10, 07 @ 9:35 am:

   Agree with Carl’s point about this is where a few Greens could have done some good.

   You assume the worst of people in Illinois, so my instinct is to go with Madigan’s freeze yet you know how devastating it is for people to have power outages in summer.

   On a related note, check this call for a review period on legislation. Would we have been in this situation now if people understood what they were voting for in the first place.




7. - Bill Baar - Wednesday, Jan 10, 07 @ 9:36 am:

   By People and assuming the worst, I mean the Pols… although when you think about it….




8. - Jeff Trigg - Wednesday, Jan 10, 07 @ 9:40 am:

   They were both wrong, Madigan more though. Government provided the energy production monopoly to begin with and that needs to be fixed. Neither of them are even discussing what needs to be done to give ComEd and Ameren some competition.

   The best incentive for building new energy production facilities are higher prices. This is also the best incentive for alternative energy production. Solar, wind, etc. The State needs to somehow facilitate new energy companies if we really are concerned about more than the next two election cycles.

   That’s not saying they need to continue to protect the current monopolies.




9. - Ali Bin Haddin - Wednesday, Jan 10, 07 @ 9:42 am:

   The Gang of Four has spoken. Or not in this case leaving us with these alternative action plans.
   1. Buy woolen clothing. It is on sale now due to a warm winter. Protect it from moths and use next winter.
   2. Prepare to suffer in the heat of the upcoming summer. I suggest drinking plenty of cold beer. You will still be hot but you will not care.
   3. Adopt the life style of the duck. Move north in summer and south in winter and I do not mean Carbondale and Rockford.
   4. Check into property values in the Amish communities and learn how to chop firewood.




10. - Jeff Trigg - Wednesday, Jan 10, 07 @ 9:44 am:

    And not to forget Chicago’s 22% electricity rate increase wouldn’t be so bad if Chicago didn’t have an 18% electricity tax rate, 13% from the city alone.

    I thought I saw that state government itself brought in more electricity tax revenue than Ameren brought in profits. Where is the electricity tax rate freeze or relief talk?




11. - VanillaMan - Wednesday, Jan 10, 07 @ 9:50 am:

    The Electric Deregulation Act of 1996 doesn’t work as promised as long as a freeze is in place, preventing prices from encouraging competition.

    The whole rate freeze deal written into the Act sugarcoated it into being passed. This is what the Democrats wanted in exchange for the restructuring. (Deregulation isn’t want the Act gave us - it gave us restructuring with just as much regulation as before.)

    Now the freeze part of the Act has been extended from eight years to ten. If it wasn’t bad enough to freeze rates for eight years, we already have had two tacked on. The bitter pill went from big and nasty to humongous and nastier in that fuel prices have shielded residents from market reality while at the same time prevented competition to keep prices down.

    Madigan’s proposal isn’t a good one at all. We already face massive price jumps after ten years. Does he think somehow fuel prices will plummet? It is unlikely, isn’t it? So extending an unrealistic decade old rate to 2010 would be an even bigger disaster.

    Jones’ plan is better, but what the ICC has approved for Ameren and ComEd, allows them to grant loans to residents at 3.25%. We all know this percentage rate is illusionary, in that it opens residents up to higher rates at later dates, late fees, and similar practices we suffer under today with most “low interest” credit cards. Bottom line: Do we want utilities in the loan business? Just how much in debt do you want to be on your electric bill?

    When Ameren or ComEd threaten bankrupsy, what do they mean? Do they mean like in the old days, when they controlled everything from your house to the coal pile? Since 1997, these utilities are not structed like that anymore. Each step of the system has been seperated and spun off into different businesses operating together. A bankrupsy would impact only one part of the system, not the whole. So, let them threaten.

    Unbelievably, when the Act was written, it did not include how prices were to be deregulated into reflecting a post-Freeze market reality. They could have allowed prices to increase 20% for three years, starting in 2003, and expect the utilities to make up the fuel costs differences.

    Even more unbelievably, we have one party rule in Illinois - the guys that wanted the Freeze. It was their boneheaded idea to write the Freeze into the Act. And now we are seeing that they are clueless as to how to fix the problems their idea had on the Act. In both cases, in 1996 and 2006, the Illinois Democrats in office have proven to be utterly incapable of understanding basic economics. Their Socialist mentality hit reality, and now they don’t know what to do.

    Folks, this is what happens when you elect people who promise something for nothing.




12. - Rich Miller - Wednesday, Jan 10, 07 @ 9:53 am:

    VM, there was no Democratic governor in 1996.




13. - Niles Township - Wednesday, Jan 10, 07 @ 10:05 am:

    Mikey Madigan pulled one over on us again. His riling up the media and consumer groups over the electricity rate freeze that wasn’t ever going to be passed in that form was a mere diversion from the 7% property tax rate cap extenstion. Don’t forget Mikey is a property tax lawyer, as are so many of the influential pols. That’s where his bread is buttered. My guess is that the next few years will see an increasing number of tax appeals by Mikey & Co. You have to hand it to him, he knows how to use the media, public advocacy groups and the voters all for his selfish purposes.




14. - whatever - Wednesday, Jan 10, 07 @ 10:07 am:

    Madigan has played this very well. He makes the best case.

    Com Ed has bungled this thing from the start. Maybe they do deserve an increase. Trouble is they have gone out of their way to raise concerns.

    They have played fast and loose on the fact that AmGen, or whatever it’s called, is their own parent company. Then there is this phony CORE group, which hides its real control. Then you have these crazy executive salaries.

    Then of course you have all the Com Ed contributions to Emil Jones.

    It all just begs the question - if the case for a rate increase is so clear - why all the smelly games?

    I’m a pro-business guy, but this kinda stuff just breeds distrust.




15. - VanillaMan - Wednesday, Jan 10, 07 @ 10:18 am:

    I know that!
    What I was trying to say is that the freeze part of the Act was how the Democrats came aboard to vote it into law.

    They wanted the Freeze - and now we’re stuck with it.

    Was it wrong for Edgar to sign it with the Freeze attached? Seems like it now, doesn’t it? But to blame him for the Freeze is incorrect.




16. - NW burbs - Wednesday, Jan 10, 07 @ 10:20 am:

    We’ll be hit with the ComEd 20-25% increase (I believe it’s actually 22% rate increase plus a 2% service increase, but the news reports have covered this and the CORE issue so exceedingly well over the past year or so that I’m not sure).

    Regardless, that’s about a 2.5% increase over 10 years. I can understand the need for a jump and would expect that, if ComEd/Exelon and Ameren are being honest, citizens should see increases over the next few years of about 2-3% per year.

    I would go with Jone’s phase-in plan. Madigan needs to get off his high horse.

    That said, “whatever” makes several good points regarding the bungling of the situation. I’d add that the media has been much too docile regarding the topic.




17. - Silence Dogood - Wednesday, Jan 10, 07 @ 10:24 am:

    They’re both wrong. Those who support Madigan in this fight are relying on nothing more than the ‘hope’ that John Rowe and Exelon will save ComEd from certain bankruptcy if ComEd is ultimately forced , via a rate freeze, to sell its power below what it is currently paying for that power. In my view, these people severly underestimate Mr. Rowe’s resolve and fail to appreciate the impact that a ComEd bankruptcy would have on future electric rates.
    Jones is wrong because his proposal hurts those it aims to assist - low-income customers. Deferring costs for three years relieves families who are “just getting by” in the short run, but hits them with significant increased costs, that may be unaffordable, in 2010.
    This entire debate is absurd on its face. We pay market-based rates for all of our essential services, from the natural gas we use to heat our homes to the gasoline we use to drive our cars. The difference between the markets in Illinois for these services and electricity is the absence of competition (for homeowners)in the latter. Enacting a rate freeze kills any chance that a competitive market will develop here and that would result in a real tragedy — higher rates with no choice.




18. - Anonymous - Wednesday, Jan 10, 07 @ 10:32 am:

    This is a no brainer. Does anyone actually believe Joe Q voter is backing Jones’ rate hike plan? I don’t think you will find many legislators who are against this freeze articulating their views in their districts. Hey Rich, by the way, where in the heck is Rich Daley, Governor Blagojevich, and even Senator Durbin and Obama on this issue? I mean, a hefty increase in utility bills definitely affects quality of life. WHY HAVE THEY SAID NOTHING!!!




19. - aidanquinn - Wednesday, Jan 10, 07 @ 10:36 am:

    Answer: Madigan.

    Jones’ legislation was written by ComEd with no input from Ameren. I am sure ComEd interests, and no one elses, are well taken care of in HB2197.

    That was Jones’ so called compromise bill. I believe Madigan was using his bill for political reasons and to leverage all the players to the table this spring.

    The reverse auction process should be scrapped. It has failed customers in New Jersey and now in Illinois. Residential customers must be provided with more alternatives for their generated electricity supplier. Today they only have the results of the auction. And some large industrial customers are facing 300% cost increases due to the reverse auction.

    A start would be to allow certified suppliers to obtain aggregate load profiles of each utility taxing body, say all the residentials on the same municipal tax rate for Carbondale or Rockford. Then suppliers would be more apt to attempt to bid an aggregated load made up of residential customers.

    Legislation should be enacted to require local governmental bodies to somehow allow the residents of that body to vote to move forward on aggregating all residential customers and allowing the the governing body to select an alternative supplier or to accept power from the default provider, their host utility company.

    Instead of the reverse auction why not a simple bid process or request for proposals held by each electric public utility. Natural gas is purchased by utilities without a reverse auction, realizing sometimes our natural gas costs rise and at times they drop.

    With a locked in reverse auction price market electricity price changes mean nothing to the end customers and the public utility delivery companies. Who benefits? Try Exelon Generation, Constellation Energy, and Ameren Energy Services the top 3 winners in the fixed price section of the recent reverse auction process. Maybe a new tax is needed on generation sold in Illinois with the proceeds going to education funding.

    This is one process that is broken and requires fixing! The legislature sat by for 10 years allowing everyone to enjoy a rate freeze but did nothing to prepare for the changes that have occurred over those same 10 years, this is a non election year so now appears to be the right time.




20. - Anon - Wednesday, Jan 10, 07 @ 11:04 am:

    Why didn’t the Senate vote on it?




21. - grand old partisan - Wednesday, Jan 10, 07 @ 11:26 am:

    Jones.

    Freezing the price of anything for a decade is just irresponsible.

    The reason ComEd is able to “gouge” consumers is that there is no competition. And there is no competition because for the past 9 years ComEd’s rates have been kept so artificially low that no one can break into the market.




22. - Tom - Wednesday, Jan 10, 07 @ 12:09 pm:

    Madigan’s plan is great politics and bad policy. Jones’ plan is no plan but just a codification of what ComEd planned to do with or without legislation (I believe that ComEd has already received ICC authority to offer a deferred payment program, but I could be wrong on that. The google, it do nothing.) Madigan has now given cover to his caucus when the bills come in. Meanwhile, Blago did nothing and will probably end up getting most of the blame.

    As an aside, I have a question to Aidenquinn who strikes me as quite informed on this topic. ComEd should have been the largest customer of Exelon in Illinois and thus should get the best rates from them. However, a wholesale sub of Exelon offers radio ads aimed at small businesses in ComEd’s service area suggesting that the sub can offer cheaper electricity rates than ComEd can. How is that possible?




23. - Thornton Butterworth - Wednesday, Jan 10, 07 @ 12:41 pm:

    Madigan is right on this issue. He is acting in the people’s interest by regulating the monopoly price behavior of electric utlities in their markets. Senator Jones is doing the same thing on terms acceptable to the monopolists. Their approaches differ only in degree, but Madigan’s political position is stronger, more popular, than Jones’. The Speaker, lamentably, does not have appear to have sufficient rhetorical skills to counter the fog of misinformation, threats, and false choices (like the question posed by our host and CORE advertiser)spread by the monopolists and their highly skilled lackeys.




24. - Wumpus - Wednesday, Jan 10, 07 @ 12:44 pm:

    I am for common sense. If they need a rate hike, fine. But we also need to realize that it was idiotic to have a 10 year freeze. The 22% is less than if we had 2 year increases over 10 years. It is the shock that has people nervous.

    Neither are really thinking, just playing politics. We cannot let them blindly increase rates w/o explaining themselves as utilities are heavily regulated. We also cannot lock them into freezes for ever. Someone knew this was going to expire and there should have been a debate in Springfield earlier than November.




25. - PalosParkBob - Wednesday, Jan 10, 07 @ 12:59 pm:

    Comed was certainly sharp in this one.

    When “de-regulation” occurred, they broke up the system about three ways; fossil generation (which was sold to Midwest Generation), Nuclear Generation (Exelon), and distribution and marketing (ComEd).

    I inderstand that Midwest Generation bought the deteriorated fossil generation infrastructure with the understanding that they could sell directly to Illinois customers through their marketing wing, but then discovered that only Comed could sell directly to customers here.

    So much for competition.

    Now Midwest is holding their plants together with chewing gum and baling wire and will eventually be shut down, shifting generation profits back to Exelon.

    Comed kept their hand in with Exelon, which became far more efficient after most of the old Comed operations group were let go with “golden parachutes” and nuclear operations were managed by the Exelon PECO staff.

    Consequently, Comed improved it’s profitability on the Nuke side, dumped overvalued and less profitable fossil generation infrastructure, kept a virtual monopoly on distribution and marketing,and ran up great value overall.

    Rather than share the windfall on generation valuation and profitability, they kept that part of the money, and positioned the far less profitable distribution and marketing division to become profitable on it’s own by government fiat.

    Now they get the benefits of “market rates” on generation, and will add to that profit on portions of the business that were previously unprofitable.

    The lesson here is clear. Spin off unprofitable segments of your utility, escape regulation on profits from the already profitable divisions which had previously offset losses on the unprofitable ones, and force the public to make the unprofitable segments profitable while increasing profits overall.

    Buy a few Legislators for a few bucks to set up this deal for you, and have the guts to claim it will benefit the ratepayers from “competition”.

    Illinois politics, gotta love it.

    You don’t even feel the knife as it goes into your back……..




26. - beowulf - Wednesday, Jan 10, 07 @ 1:18 pm:

    This porridge is too hot, this porridge is too cold, and this porridge is just right.

    The answer is probably somewhere in the middle between Madigan’s and Emil’s wishes. It would seem like a compromise would appear to be in the best interests of the citizen’s of Illinois. Emil is suspect because many of us feel that CWE campaign donations to Emil is what makes Emil push for an electric rate increase. Madigan knows that by appearing to stand up for the average Illinois voter and refusing this CWE rate increase, he will win lots of supporters for himself and Lisa down the road (not that he nor she needs anymore).

    Emil would be wise to tell his buddy, Commonwealth Edison CEO John Rowe to take a sizeable pay cut from his current $4,000,000.00 per year salary. That would make it far more palatable for the rest of us to agree to a rate interest. Emil has been rubbing elbows with the “rich & the famous” for too long and he has lost touch with what the average family has to deal with to make ends meet.

    Let John Rowe lower his salary from $4,000,000 per year to $1,000,000 per year and then maybe we will believe him when he cries, “I feel your pain.” In the meantime, all that I will hear when he and Emil talk is, “Let them eat cake.”




27. - Disgusted - Wednesday, Jan 10, 07 @ 1:28 pm:

    What makes people more mad, I think, than the amount of the increases proposed is the amount given to the likes of Emil Jones, et al, and the outrageous salaries and golden parachutes given to CEO’s who don’t do a damn thing, intellectually or work-product wise to deserve it. That is done by the rank and file, while the CEO glad-hands the stockholders.

    Let’s beat them at their own game.

    1. turn the heat down to 60-62 and put on more
    layers.

    2. turn on one TV and keep computers, lights and
    other TV’s off in other rooms.

    3. use your fireplace or wood-burner if you have
    one.

    4. cover your windows with thermal draperies,
    winter and summer and keep them closed during
    the coldest and warmest parts of the day.

    5. use your gas and electric appliances
    conservatively.

    6. use electrically run toys (big and little
    boys)and appliances very conservatively.

    7. rake leaves instead of blowing them if you
    have an electric leaf blower.

    8. keep outside lights off unless you are
    expecting someone. Turn Christmas lights on
    only from dusk to 9 p.m.

    And so on and so forth. Be very conservative and save yourself some money, while making the utility chiefs fight for their big paychecks. Then smile with self-satisfaction.




28. - Cassandra - Wednesday, Jan 10, 07 @ 1:38 pm:

    John Rowe’s salary is irrelevant. Cutting his salary by three million is hardly going to fix the problem. We grossly overpay CEO’s in this country. But that’s a separate issue.

    Sounds like Emil may be right for the wrong reasons (all that campaign cash). Can we really afford a major meltdown of electrical services in Illinois? And why would we expect the electric companies to stop acting like corporations and start acting like welfare offices. And if we do extend the freeze and the companies go into bankruptcy, who pays? Not the companies. We do.
    Californians are still paying for their utility bankruptcy.

    Utilities are getting more expensive. Another reason to be grateful to the guv for not raising our state income taxes. We need the money for our
    utility bills.




29. - Garp - Wednesday, Jan 10, 07 @ 1:39 pm:

    I have recovered from the inaugeration enough to ask this question about certain reporters that were there. During the national athem and the pledge of allegience many stayed seated and busily typed away at there computers or did what they do. Don’t they feel obligated to respect the country they work in? I was a little surprised at their actions but maybe I am wrong and that is the standard operating procedure from the 4th branch. Many of the reporters did get up. What is the norm?




30. - Anon - Wednesday, Jan 10, 07 @ 1:53 pm:

    Bottom line is that only about 3 people in this thread understand the way electric markets have evolved over the last decade.

    Madigan’s bill tries to address a problem that’s only solved through re-regulation. If the State bought back the generation plants, we would be justified in thinking that we could get our electricity at their marginal cost. In the case of the nukes, which supply 90% of the power in northern IL and 50% of the power overall in the state, that cost is about 2 cents / kilowatt hour. The auction yielded a rate of 6.3 cents / kilowatt hour.

    Emil’s bill is a bigger joke because, while it is the utility’s bill, it lays bare their falicy of their arguments. They argued at the ICC that the only way that they could purchase power was from the open market and that they had to accept the price the open market provided. Essentially, ComEd and Ameren are now cast as pure price takers. They then turn around and propose a bill where they can defer some of the recovery on the cost of procurement. Just complete garbage. Either you’re a price taker and have to get full reimbursement ASAP to keep a clean balance sheet, or you’re able to manipulate the price of power. It’s one or the other. Jones’ bill implies that it’s both which, in fact, it is.

    The guy that posted the energy savings tips is basically right; the best way to kill the utilities on Wall Street is to reduce demand. If you reduce demand, the companies that make all the money, the generators, will loose in the long run. The problem is that no one, and I mean no one, is talking about the state or the utilities steping up and putting together an energy efficiency program which would help customers of all rate clases.




31. - zatoichi - Wednesday, Jan 10, 07 @ 2:27 pm:

    Politics aside, I work for a small company. We are estimating Ameren’s 50% jump will increase our electric bills $35,000 to $50,000 a year. Add needed electrical upgrades (efficient ballasts) and salary compression issues through minimum wage adjustments (and assoicated benefits) and we will hit over $80,000 in new costs. May be peanuts to Rowe at $4M + bonus a year, but it will likely cost 1-2 jobs here just so we break even.




32. - Anon - Wednesday, Jan 10, 07 @ 2:33 pm:

    Why didn’t the Senate vote on it?




33. - Bill Baar - Wednesday, Jan 10, 07 @ 3:30 pm:

    Bottom line is that only about 3 people in this thread understand the way electric markets have evolved over the last decade.

    I’m not pretending to understand.

    And I resent having to research a dissertation to sort out if I’m getting raked over the coals on it.

    I can tell you something is seriously wrong. I can still whistle that “little bill” song from the ComEd commercials and remember the ComEd guy coming to talk to us kids about nuclear energy…




34. - Bill Baar - Wednesday, Jan 10, 07 @ 3:42 pm:

    Electricity costs less today you know,
    then it did many long years ago.

    Segment three from NBC News Feb 23, 1967 includes the Com Ed Little Bill commercial.




35. - Mr. CUB - Wednesday, Jan 10, 07 @ 4:14 pm:

    Why does CUB get a free pass in this conversation? CUB has received a million dollars a year since 1997 to promote deregulation … and yet has done nothing to educate consumers about their options and to promote competition. CUB gets an F and should be asked by media what it did with its $10-million.




36. - Way Northsider - Wednesday, Jan 10, 07 @ 5:16 pm:

    Com Ed is hugely incompetent. What choice do I have to buy electricity but Com Ed? Until there is REAL choice they need to be regulated. I prefer a rate freeze i.e. the Madigan plan.




37. - Tessa - Thursday, Jan 11, 07 @ 6:15 am:

    I prefer the rate freeze plan under Madigan, but something worded differently. I don’t necessarily agree with either one of their plans in whole. I think ComEd and Ameren should give less to the people in control of the companies and pass that savings along to the people who have to pay for the services.




38. - Chicago Lou - Thursday, Jan 11, 07 @ 8:02 am:

    You have to take off your hat to Madigan and Jones. Who plays politics better than these two? Don’t you see? It’s a win win for both. Everyone involved can tell their constituents that they were against lifting the freeze completely. “It was the other guy’s fault”. Both save face. I’m sure they both sent champaign to each other. Who does it better baby”.




39. - Capt. Obvious - Thursday, Jan 11, 07 @ 8:08 am:

    Hey Rich:
    Someone stole my identity at 2:38 and used bunch of swear words. Can you track the MOPe down and ban it down and ban them for life?
    Your friend
    Capt. Obvious




40. - Rich Miller - Thursday, Jan 11, 07 @ 8:14 am:

    Those comments never appeared. Somebody out there is about to get a visit from a very unfriendly person.




41. - Squideshi - Thursday, Jan 11, 07 @ 7:39 pm:

    I don’t think there should be any rate hike. Exelon obviously doesn’t need the increase because they’re one of the most profitable utilities in the nation. The rate hike is just about increasing that already large profit margin.

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