Madigan intervenes to block ComEd electricity auction plan

CHICAGO, ILLINOIS - Illinois Atty. Gen. Lisa Madigan moved to block Commonwealth Edison's plan to buy electricity at auction, saying it violates laws that protect consumers who lack competitive choices.

Madigan filed a motion with the Illinois Commerce Commission to stop ComEd's plans for an auction. She wants the ICC to retain authority to decide whether power rates are "just and reasonable," as the state's utility law dictates.

Utility executives want rates set through a wholesale auction plan. They acknowledge that rates would rise but will not predict how high.

"ComEd itself has already said that if they went to auction, rates would increase by at least 15 percent, up to 20 percent," said Madigan. "So, obviously, we have concerns about that."

Although many details are unclear, the utility is proposing to buy electricity for its customers through annual auctions. Power generators would bid to supply electricity, with ComEd accepting the lowest offers.

Residents and consumers would pay the auction rate for electricity. ComEd would charge a delivery fee but receive no profit on power sales.

But Madigan believes such rates--dictated by the market, not by the cost of generation--would be unfair.

"The law was put in place for the protection of customers," Madigan said. "We think that should maintain until such a time that there actually is competition."

Although the state's electricity market has been deregulated, there is no competition for residential and small-business customers.

Joining Madigan in filing the motion were the Cook County state's attorney's office, the Citizens Utility Board and the Environmental Law & Policy Center.

Executives at Commonwealth Edison remain confident the auction will go forward as planned, dismissing the idea that some bidders will be deterred by opposition from state officials.

"We think there will be plenty of people who will show up for the auction," said Darryl Bradford, a Commonwealth Edison vice president.

Bradford said a rate increase through the auction is "likely." He noted that since 1997, Illinois residential and small-business consumers have enjoyed a rate freeze and a 20 percent rate reduction.

He said he believes a compromise plan can be worked out with opponents.

Others said they thought the dispute would end up in the hands of lawmakers.

"The legislature will have to make the policy decision going forward in terms of how ComEd procures its power," said Mark Pera, a Cook County assistant state's attorney who handles utility issues.

Rob Kelter, general counsel for the Citizens Utility Board, said his group wants to ensure that the auction's results are fair and prudent. He said the ICC must "determine whether the company did everything that it could to hold those costs down."