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ComEd says bills would get smart grid back on track

(MCT) — Commonwealth Edison is pitching lawmakers on new legislation that the utility says would get its electrical grid modernization "back on track."

In advertisements aimed at legislators, ComEd blames regulators for smart meter delays, saying a decision to cut funding has affected "ComEd's ability to fund the work."

A bill sponsored by Senate President John Cullerton, however, does not require ComEd to speed up its timeline for deploying smart meters or require ComEd to end a court battle over its funding concerns. Instead, it requires consumers to pay ComEd with interest for alleged funding shortfalls and gives the utility a temporary pass if it doesn't meet the investment promises it made under the original grid modernization law passed in 2011.

A second bill sponsored by Rep. Lou Lang, D-Skokie, in the House would require ComEd to install smart meters as soon as possible.

ComEd says it supports both bills and intends to speed up its timeline for the installation of smart meters if the legislation passes. The company adds that it has no plans to end its court fight with the Illinois Commerce Commission.

"Nobody wants to wait until 2015 to put meters in, but as we've said, there needs to be certainty about the funding," said Thomas O'Neill, ComEd senior vice president for regulatory and energy policy and general counsel.

The AARP, which has been monitoring the smart grid program, says the proposed legislation would allow ComEd to pad its bottom line without meeting deadlines.

"It just gives them a complete free pass on everything. You can delay, you can get your money back and we're not going to hold you accountable for anything," said Scott Musser, AARP Illinois associate director.

Illinois Attorney General Lisa Madigan's office opposes the new legislation.

"We remain concerned that these changes would once again increase ComEd profits at the expense of ratepayers," Maura Possley, a spokeswoman for Madigan, said Monday.

ComEd, a unit of Chicago-based Exelon Corp., balked on an aggressive investment schedule last year when regulators cut the funds it expected to receive under the smart grid law.

"Unfortunately, we must make adjustments to our investment plans if we do not receive full funding, as the law envisioned," the company said in December.

In exchange for $2.6 billion in consumer rate hikes over 10 years, ComEd had pledged to digitalize the electrical grid. The utility said operational savings would ultimately save money and that in-home devices would give consumers more control over their electricity usage. New smart meters were to be installed throughout ComEd's service territory of roughly 3.8 million customers. About 130,000 smart meters have been installed as a pilot project.

But when it came time for 2011 law to be implemented, ComEd and the Commerce Commission disagreed over interpretations of the law. ComEd filed a court appeal over 12 technical matters that translate into roughly $100 million per year to ComEd. The dispute continues in court.

The proposed legislation at the General Assembly would address three of those issues: whether to treat pension as an asset or a liability; if returns should be based on equipment in the ground at year-end or the average amount of equipment that was in the ground throughout the year; and the interest rate to be used for truing the utility's actual versus hypothetical costs.

But that would leave nine other matters amounting to $35 million per year to ComEd. And that's why ComEd doesn't intend to drop its suit.

"This is about getting the dollars back in place to allow us to make the investments as specified under the law," O'Neill said.

Under the law passed in 2011, ComEd must invest in grid modernization efforts according to a schedule and is required to come before the Commerce Commission periodically to prove it is making those investments on time.

The pending legislation would ease the burden for ComEd. For instance, ComEd would not be held accountable for failing to meet the obligations under the 2011 law for any time prior to the bill's enactment. In addition, ComEd could not be held liable for falling short of its investment schedule for a year to 18 months after the bill passes.

The company under the proposed legislation would still be required to show that it is making progress on its promises to consumers, such as lowering the number and duration of outages and cutting back on estimated bills.

"This whole thing was about bringing a modern grid to our customers to meet increasing customer expectation, and it's about bringing jobs and economic development, improving reliability and customer choice," O'Neill said. "This legislation is intended to put us back where we should have been and about giving us the ability to finance these mandated investments. We're confident we can do that."

If the legislation passes, ComEd says ratepayers can expect to see minimal change in their bills. It would increase the average residential customer bill of $82 per month by about 40 cents per month in 2014, increasing to about 80 cents per month in 2017, the company said.

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