Lawmakers should act to reform utility rate system

The Chicago Tribune editorial board’s recent assertion that “Soaring ComEd bills have us all on edge. Springfield must confront our electricity woes head-on” misidentifies the biggest driver of our rising bills and fails to offer a near-term solution for real relief.

Most people might be surprised to learn that the biggest part of their energy bill isn’t the electricity itself. It’s what ComEd charges to deliver that electricity over its wires. And they’ve been very good at getting paid more and more to do that, while claiming that the real driver of rising energy bills is the cost of electricity. In reality, the inflation-adjusted cost of electricity in PJM — the regional grid that includes Illinois — has stayed largely flat over the past 15 years, while monopoly utilities have earned growing returns on their energy delivery investments.

Even worse, ComEd portrays itself as an advocate for its captive customers and wants us to thank them for it. In a recent article, ComEd’s $10M relief fund running out after 60,000 customers apply in first week, the utility says a $10.60 average cost increase in summer bills is due to higher electricity rates.

This is true. But it represents only a small portion of monthly bills, while profits from transmission and distribution keep climbing. Just this year, ComEd announced a nearly $10 increase for the portions of the electric bill that directly benefits them: transmission and distribution charges. It is the first part of a$606 million rate increase over four years, approved by the nonelected Illinois Commerce Commission (ICC).

ComEd’s “generous,” one-time $10 million relief fund to help offset higher energy costs this summer accounts for little more than one-and-a-half percent of the rate increase the utility recently secured from the ICC — an increase of hundreds of millions of dollars that directly benefits the utility, at your expense, just for doing the exact same thing they have done for decades: transmit the power.

Adjusted for inflation, distribution and transmission costs for the typical ComEd customer nearly doubled from 2010 to 2023. These are the charges that make money for ComEd, its parent company, Exelon, and its shareholders.

ComEd charges more to deliver cheaper energy while blaming periodic price increases for rising bills.

Why are they doing this? ComEd’s parent company, Exelon, has shareholders, and they’ve made growth commitments to Wall Street. That is not inherently a bad thing for businesses in general, but when we grant a utility like ComEd the privilege of a monopoly to provide important infrastructure, we expect them to work in the public’s interest and not pad their profits.

Instead, ComEd consistently extracts increasingly more money from us as their captured customers on behalf of Exelon. Last year, ComEd’s net income contribution to Exelon was nearly$1.1 billion, an increase of 143% since 2020. Largely due to ComEd, their largest monopoly utility, Exelon’s earnings have risen every year since 2021, with promised growth up to 7% every year through at least 2028.

Don’t let them fool you into gratitude for an already exhausted $10 million “relief fund” that is less than 1% of ComEd’s net income in the last year alone.

As the Tribune’s editorial explains, “next summer’s electric bills will see more upward pressure after the results of a power auction” completed by the regional, multi-state grid manager. Even with this uptick in energy prices next year, most of the costs ComEd packs into our bills are unrelated to the cost of energy.

The Editorial Board is right that Springfield needs to act quickly next session, but misses the quickest and most effective solution to give real relief to ComEd’s customers. With a regulator asleep at the wheel for too long, I urge ratepayers to join me in calling on lawmakers to reform utility ratemaking and rein in ComEd’s out-of-control spending. It is essential for lawmakers to prioritize consumers by taking action now.

• Emmanuel Thomas is a political activist and former member of the Community Unit District 300 Board of Education.