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Chicago-Area Black and Latino Elected Officials and Community Organizations ask the General Assembly to Reject ComEd’s Mandatory Demand Charge Proposal
Today, 17 city and county elected officials, community and consumer organizations sent a letter to the Illinois General Assembly asking them to reject ComEd’s proposal to impose a mandatory demand charge on all residential customers. This unprecedented proposal was included as part of a larger energy bill introduced midway through the 2016 legislative session.
“Our communities have been hit with enough tax increases, new fees and bill add-ons and should not be subjected to a largely untested electricity rate policy that will make it harder for families to manage their utility bills,” said Cook County Commissioner Chuy Garcia.
The letter demonstrates growing opposition to ComEd’s proposal in Chicago and Cook County, where the utility typically enjoys strong political support. Opposition from high profile Black and Latino elected officials and community organizations will make ComEd’s already challenging effort in Springfield more difficult. The letter signers join a growing list of opponents, including Attorney General Lisa Madigan, consumer and anti-poverty groups, and economic and environmental justice organizations.
No other legislature or public utility commission has ever approved charges of this nature. Over the past year, utilities have proposed some form of demand charges in 14 states. So far every proposal that has been settled has either been rejected or withdrawn. Illinois is the only state where the utility has circumvented the utility regulator, the Illinois Commerce Commission, and asked the legislature to take the unusual step of setting utility rate structures.
“Residents of Chicago and particularly of the 20th Ward, don't want a confusing new electric charge on their utility bills,” said 20th Ward Committeeman Kevin Bailey. “We have had enough of people promising lower taxes and fees and having the exact opposite happen."
A small municipally-owned utility in Glasgow Kentucky imposed a similar rate structure on customers this January. By August, Kentucky’s Attorney General had received so many complaints he asked members of the Kentucky Congressional delegation and federal regulators to step in to help find a resolution.
ComEd’s proposal would change the way residential electric customers are billed – from a rate based on overall energy consumption to a rate based on a short period wherein a customer’s electricity usage is highest. ComEd proposes to measure electricity demand in 30-minute increments, 6AM to 10PM, Monday through Friday, and base each customer’s bill on their 30-minute increment of highest usage over the course of an entire month.
Consumers have no way of monitoring electricity demand – even new “smart” meters do not provide this information. Turning on a dryer, toaster, and microwave at the wrong time, or an automated function like an electric water heater clicking on, could significantly increase a customer’s bill.
For many, electricity bills are a significant portion of their monthly expenses. Under a mandatory demand charge, a single half-hour’s electricity use can cause an unexpected bill spike that puts energy or other essential expenditures out of reach.
“Chicagoans of all ages are crushed under the rising cost of living in the city, coupled with skyrocketing taxes including property, cell phone and water taxes, and depleted public services,” said AARP Illinois State Director Bob Gallo. “The last thing Chicago consumers need is new rate charges that will punish them for using power when they most need it and will be especially harmful to retirees, stay-at-home parents and those who work from home. ComEd has made billions of dollars from automated rate increases. It's time to put an end to their greed by saying no this bill."
This is the second organized letter sent to the General Assembly registering opposition to the proposal. The first came from consumer and anti-poverty organizations, including AARP Illinois and Illinois Public Interest Research Group (PIRG).
“In our changing energy landscape, consumers have unprecedented opportunities to conserve electricity through energy efficiency and even produce electricity through roof-top and community solar, saving consumers’ money and benefiting all rate payers,” said Abraham Scarr, Illinois PIRG Director. “By making utility bills unpredictable and harder to manage, mandatory demand charges disempower consumers and remove incentives for consumers to save money by taking control of their electricity consumption.”
The bill including ComEd’s proposal, Senate Bill 1585, had a committee hearing in the Spring but did not advance. The legislature may take it up when the legislature reconvenes in November.
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