Back to drawing board for ComEd

ComEd says it is still weighing whether to appeal to the state Supreme Court after an appellate court Friday struck down the utility's plans for a $396 million rate increase to support major infrastructure improvements.

Here's a better idea: Change the plans.

On the heels of a 2008 rate increase of $270 million and in the midst of a backbreaking recession, ComEd asked last year for a 7 percent hike to fund "modernizing" its electricity delivery system and "recover the cost of substantial investments" made since 2007.

In September, the Illinois Commerce Commission went along with the plan, but Illinois Attorney General Lisa Madigan, the Citizens Utility Board and other groups rose up to fight it in court. On Friday, the Second District Appellate Court overturned the ICC and agreed with the plaintiffs, who complained the utility, aiming to boost its profit margins, was seeking more money than it needed.

Not surprisingly, the attorney general's office quickly hailed the decision as a victory for ComEd ratepayers, and ComEd declared that the ruling imperils its plans for strengthening the reliability of its electricity delivery system and preventing outages.

The reality is more likely somewhere in the middle. To be sure, ComEd ratepayers ought not be saddled with a 7 percent higher electric bill at a time when their own incomes are declining or at best holding steady. And any one of the tens of thousands of ComEd customers who have suffered through a long outage whenever there's a storm or heavy rain knows that the utility needs to upgrade its network.

But a reasonable debate rages over just how much the customers should be put on the hook for covering those costs.

This is after all and ComEd has no one but itself to blame for the fact that this issue keeps coming up the company that came out of the blue last spring with a $500 million offer to help the state with its budgetary problems in exchange for a rate increase.

ComEd quickly rescinded the offer and acknowledged it was a mistake, but it is difficult if not impossible to overcome the logic that if ComEd had $500 million lying around to cough up to the state of Illinois, it can manage the payments on a $396 million upgrade of its technology and equipment. Indeed, by our math, it would seem to be able to pay for the upgrade and still have more than $100 million left over.

No doubt, the mathematics of the complicated formulas that go into determining the rates and cost obligations of a public utility are not that simple, but the shape of the overall picture seems fairly clear.

ComEd has not shown that it needs 7 percent more income to build what it calls and indeed what its customers deserve "a 21st-century electricity grid."

So, it has a couple of options in the face of the appellate court's ruling. It can sink more money into the pockets of lawyers and require the state to do the same in an uncertain effort to persuade the Illinois Supreme Court that the facts on the surface don't reflect its true financial picture. Or, it can go back to the drawing board and develop a funding proposal that demonstrates more respect for its customers.

The wise choice is the drawing board.