A letter came the other day from the Citizens Utility Board asking for money. The folks at CUB need my money because they are on a crusade against big business and the wealthy special interests.
I know this because CUB mentioned “big business” eight times and “wealthy special interests” five times in the mailing.
The letter wrapped up by warning that if CUB doesn’t get my generous financial contribution soon, “we may end up at the mercy of the politicians in Washington.”
Big business, wealthy special interests and Washington politicians. Oh, my.
All this talk about nasty people had me so scared my hand was too shaky to write the check. So I held off until I could find out what this is about.
This is about how much you’re going to pay for electricity. The Illinois House has passed a bill to take the government regulations off electricity. This is supposed to create competition for Commonwealth Edison and the other electric monopolies, so somebody else can come in and power up your house at a much better price.
The bill says that you will get a 10 percent rate cut next year, and a 5 percent cut in 2000 from ComEd. A few years after that, you’re supposed to be allowed to buy electricity from anybody who will sell it to you.
The House passed the bill last spring, but the Senate didn’t vote. This set CUB on its crusade. CUB says it is fighting big business and the wealthy special interests that want to stop the bill.
But there’s something odd about this. CUB’s partner in the crusade is ComEd.
ComEd, which CUB has always screamed and raved was the biggest and baddest of the wealthy special interests. Funny, the letter didn’t say that CUB was in bed with ComEd now.
There had to be an explanation for this, and here it is. The folks at CUB have been played for fools, and now they’re playing their members for fools.
CUB bought into the deregulation bill because it promised a modest rate cut. CUB figured its members would be happy with a rate cut and wouldn’t worry about the fine print.
But they ought to worry about the fine print. It doesn’t create competition for ComEd, it protects ComEd from competition.
The bill says that all residential customers will be free to sign up with another electric company after 2002. That’s what CUB says, too: “In a few short years, all consumers will be able to shop around for a new electric company. . . .”
Ah, but that’s not quite true.
If you sign up with another company, you’ll have to pay ComEd for losing you as a customer. That’s so ComEd can pay off the cost of its nuclear plants.
ComEd will be allowed to collect those payments for the next decade. People who are familiar with the bill–including some of its sponsors–say the payments will just about eat up any savings you would get by going with another company.
That, and some other provisions in the bill to arm ComEd against competitors, makes it highly unlikely that any company will be able to sell electricity to residential customers for less than ComEd does.
So the competitors won’t try. They’ll go after the larger industrial companies, which will have a different set of rules, will get in on the competition right away, and will save far more money than residential customers will. Big, ahem, business will enjoy a competitive market, while homeowners and small businesses will be stuck.
When you press the people at CUB and the sponsors of the bill, they say this is correct. They say that Joe Bungalow doesn’t want to be bothered with sorting through offers for cheaper electricity, he just wants his rate cut and to be left alone. CUB, it seems, doesn’t have a lot of faith in the ability of people to go shopping.
And that’s the way it would be, except Senate President James “Pate” Philip had some suspicions about the 253-page bill. So he stopped it. Then he asked the Illinois Commerce Commission to figure out what was going on.
Here’s what the ICC said: “The Commission finds the balance struck by (the bill) leans too heavily in favor of the utilities. . . The residential rates of (ComEd) will stay substantially above the current Midwest average . . . until 2009.”
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The ICC went on for 53 pages about all the ways that the legislation would prevent competition for residential customers.
It must gall CUB that the guy who blew the whistle on this was Philip, because reformers love to hate the guy. They see Philip as the protector of big business and the wealthy special interests.
Philip may well have been listening to the Illinois Manufacturers Association instead of consumers on this, but nevertheless he wound up on the side of the angels thanks to the ICC. And CUB wound up in bed with the big and wealthy you-know-who’s. Not that you’d know that from their solicitations for money.
Negotiators are trying to work out changes in the bill. The Senate is likely to come back in a few weeks with a bill that gives homeowners and small businesses a chance to get in on the competition.
Chances are, ComEd will agree to it. If it blocks a deregulation bill, there’s a possibility the ICC will step in, slash ComEd’s rates, and stop the utility from collecting as much from its customers to pay for the cost of the nuclear plants.
Now, don’t blame ComEd in all this.
It’s not my favorite company, especially when it runs around chopping up trees in bizarre patterns so they look like a long line of loonies dancing to that Y-M-C-A song.
But ComEd is going to be the electric company for a lot of people for a long time, so the legislature has an interest in helping it to stay solvent. The trick is to help it stay solvent while giving customers a fair shot at an electricity marketplace. The bill passed by the House doesn’t do that.
ComEd has been fairly honest about deregulation. It agreed to a modest rate cut so it could have a chance to keep its residential customers for at least another decade. It doesn’t pretend to protect anyone from big business and wealthy special interests. It doesn’t pretend to be anything but the power company.
But CUB? The self-styled do-gooders are pitching a phony crusade. The check’s not in the mail.