Quinn vetoes electric rate hike bill

September 12, 2011 2:45:46 PM PDT
Illinois Governor Pat Quinn has blocked legislation that grants a rate hike to ComEd. The governor vetoed a 10-year, $3 billion plan that includes money for infrastructure.

The utility claims the rate hike is needed to finance the so-called smart grid.

But the governor says the legislation is a nightmare for consumers, and he believes a rate hike is unfair.

After an intense lobbying effort by ComEd and labor unions, both the Illinois House and Senate were convinced the utility should be allowed to raise its rates automatically to improve its service. But the governor, a longtime consumer advocate, paid closer attention to some different voices.

That Governor Quinn decided to veto the measure was not a surprise. Beginning shortly after Senate Bill 1652 passed the General Assembly in May, Quinn let Commonwealth Edison know that Monday's veto was inevitable.

"We're not going to let them have a bill passed and signed by the governor today that will harm consumers for years to come," said Governor Quinn.

The so-called "smart grid" bill would have allowed ComEd to automatically raise its rates -- to ensure its profit margin -- as it invested nearly $3 billion to modernize its system.

The company had labor's support for its promise to rebuild itself.

"It would also help out companies that produce wire, that supply wood poles, wood arms for all the work that would be going on," said Bill Niesman, IBEW Local 9.

But Illinois Attorney General Lisa Madigan said the bill would have allowed ComEd -- free of regulatory oversight -- to "pickpocket" consumers.

"This bill would have resulted in enormous annual rate increases of approximately 9 percent a year," said Madigan.

ComEd says the modernization program would have increased the reliability of its system, criticized for too-frequent blackouts and delays in restoring power after weather-related outages.

"It's a jobs bill, an economic development bill, an environmental bill, a consumer benefits bill, a regulatory bill and an infrastructure bill, ComEd said in a company statement Monday.

ComEd convinced the majority of lawmakers to vote for the smart grid last spring.

"The only way you can improve the sustainability of providing service is investing in the infrastructure, and that was the heart of the bill," said Illinois Senator Kwame Raoul.

Now the House and Senate need supermajorities to override Quinn's veto.

"If they want to try and override the veto, be my guest. Because we'll, I think, show them as we did 30 years ago that the people of Illinois are mightier than Commonwealth Edison," said Quinn, who helped form the Citizens Utility Board nearly 30 years ago.

The governor said his administration and consumer groups are willing to sit down with Commonwealth Edison to discuss other terms for rebuilding the state's electric grid. If there is an attempt to override the veto, it would need a three-fifths majority in both the House and Senate.

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