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The Illinois House today will consider omnibus energy legislation that could provide utility companies with windfall profits at customers’ expense. If passed, the legislation, Senate Bill 2408, would extend formula rate policies that guarantee utility profits.
In the wake of the ComEd corruption scandal, the legislation fails to include key policies Illinois PIRG and allies have called for, policies that were included in Gov. JB Pritzker’s proposed legislation in April, including a complete end to formula rates, ending similar gas utility bill surcharges and ending utilities’ ability to charge customers for utility “charitable” giving.
Last week, AARP Illinois released a new analysis that found the legislation would result in a $15 monthly increase on the average residential customer’s utility bill and a $14 billion overall increase in customer bills over the next decade. Of that $14 billion, the single biggest cost driver is not the Exelon bailout or increases in renewable energy funding, but rather ComEd profits, through higher distribution rates. Analysis from Crain's Chicago Business found similar, while lower cost, outcomes.
Illinois PIRG’s written testimony before the House Executive committee can be found here.
In response, Illinois PIRG Director Abe Scarr made the following statement:
“Let’s make one thing clear: This legislation does not end formula rates. It continues formula rate utility profit guarantees in a ratemaking structure that is more generous to ComEd and Ameren than the status quo.
We do not need to guarantee utility profits to eliminate carbon emissions from the power sector, nor to invest in renewable energy, nor to achieve other praiseworthy goals of this legislation.
In the wake of the ComEd bribery scandal, the Illinois General Assembly had the opportunity to make a clean break from the tainted energy policy approach of the past. This legislation fails to meet the moment.”
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