Regulate, yes, but get ‘smart grid’ going

More frequent reviews of electric rates. A better system for monitoring and providing electricity.

Most of the parties involved would agree that the argument over utility legislation in Illinois boils down to those two considerations. But all would quickly acknowledge, too, that the issue is not nearly that simple.

ComEd says it needs the money provided through this legislation to support its investment in state-of-the-art “smart grid” technology that gives consumers more control over their electricity usage and enables the utility to respond more quickly to problems in its network.

Gov. Pat Quinn and other opponents contend the law, which Quinn vetoed over the summer, is a smoke screen obscuring regulatory revisions that would guarantee rate increases to ComEd and other utilities and weaken oversight.

And in fact, it’s important to note that an upheaval in the regulatory review process doesn’t have to be tied to upgrading ComEd’s infrastructure. Each function could have been the subject of its own specific legislation. But linked they are, and as it happens, it’s just as well. Both aspects of the legislation are valid, the one — smart grid — almost critically necessary and the other — a revision of the rate-review process — at least reasonable.

The case for smart grid hardly needs to be made. Even ComEd’s most persistent critics acknowledge that smart grid, a wholesale technology upgrade that would directly affect every ComEd customer, is beneficial to consumers, businesses in particular, and critical for the utility to improve its response to outages.

The thornier question centers on how to pay for it. ComEd wants a rate hike now, and a restructuring of the rate review process that would permit the possibility of annual rate increases, based on a predetermined formula. Critics support only small modifications of the current process, which requires ComEd and other utilities to seek rate adjustments only when they can demonstrate the need for money to support infrastructure upgrades or to offset specific costs.

The trouble with that thinking is that it perpetuates a system that has nearly a yearlong delay built in yet offers, if any, only marginally better oversight of the utility. Moreover, at this point, further delays of smart grid merely prolong the wait for its considerable benefits and for a standard of customer service against which ComEd has too often fallen short.

ComEd has proposed benchmarks that demand more of the utility. Lawmakers themselves are reviewing tougher standards and structural revisions to the formula governing rates. That’s fine. There’s room for negotiation and compromise within the process. But differences between the sides are not so great that we shouldn’t be able to see a new regulatory process and, more important, real movement toward smart grid by the end of the session.