Eye On Illinois: Utilities’ profits, user rates, government input an intractable twist

Commonwealth Edison commands a significant amount of news and analysis attention, but it’s far from the only utility.

Capitol News Illinois last week reported on the “unprecedented” number of rate increases on the table from not just ComEd but Ameren Illinois, Nicor Gas, Peoples Gas and North Shore Gas. Altogether the proposals represent a combined $2.8 billion in electric rate hikes over four years and $890 million in gas for just next year.

David Kolata, who recently left the Citizens Utility Board as executive director, told CNI, “The utilities are way over-asking,” among other insights. The utilities, of course, think otherwise. (Visit tinyurl.com/2024RateHikes for the full report.)

Without getting too deep on potential outcomes, the situation affords an opportunity to examine process.

In order to raise rates on customers, utilities must get approval from the Illinois Commerce Commission, which CNI said is part of an 11-month regulatory process. CUB, which lawmakers created in 1983 to advocate for consumers, has asked the ICC to cut the electric request at least by half and shave $231.8 million off the gas hike push.

“Consumers’ resources are considerably more limited than investors’ appetites for healthy profit margins. Keeping the lights on and the house warm are basic necessities. So long as there’s money to be made off that minimum demand, the needs of the average utility customer will never be more than half any given conversation.”

—  Scott T. Holland

ICC staff, along with third parties like CUB, will make their cases before an administrative judge and the five-member ICC board. Three of those members are new since March. One is former Chairman Doug Scott, replacing Carrie Zalewski. Gov. JB Pritzker spoke out against the gas rate request right before naming the three new members.

That’s a lot of moving parts before getting into changes in how utilities seek rate hikes, the commission’s specific powers and the fact the federal government has a lot to say about utility infrastructure. Then there’s the pesky little truth that often pops up when kicking the tires on something like ComEd’s bribery scandal: many Illinois utilities are accountable to investors.

No one doubts the utilities’ cost of business is increasing – the cost of everything is increasing – and few would advocate for doing electricity and gas infrastructure on the cheap. The same is true of water. Many of the jobs in these fields are physically and mentally demanding, with safety and speed paramount, often balanced against the unpredictable effects nature may have on the grid.

But consumers’ resources are considerably more limited than investors’ appetites for healthy profit margins. Keeping the lights on and the house warm are basic necessities. So long as there’s money to be made off that minimum demand, the needs of the average utility customer will never be more than half any given conversation.

Next time the opportunity arises, ask your state lawmaker for their take on the rate process and utilities in general. Their answer might help you understand a broader philosophy about the role of government in everyday life.

• Scott T. Holland writes about state government issues for Shaw Media. Follow him on Twitter @sth749. He can be reached at sholland@shawmedia.com.