The gap in paying for ComEd’s grid plan

There are two versions of ComEd’s $15.3 billion grid plan, and they don’t match.

In the version ComEd files with Illinois regulators, the plan is a careful blueprint for reliability, refined after the Illinois Commerce Commission (ICC) rejected the company’s first attempt in 2023 as unaffordable.

In the version Exelon, ComEd’s parent company, told investors on its July 30 earnings call, the same plan is working. Distribution and transmission rate increases were cited as reasons Exelon’s second-quarter earnings rose. Only one of those audiences is being asked actually to pay for it, and it’s not Wall Street.

The Citizens Utility Board (CUB), the state’s consumer advocate, has already raised serious questions about the gap between those two stories. In testimony filed in the ICC docket, CUB identified more than $1 billion in spending that was described as inflated, unjustified or mislabeled to avoid scrutiny, on top of a plan that’s already 21% more expensive than the proposal ICC rejected last time.

CUB highlighted that ComEd is claiming 75% of its proposed new capital spending is “mandatory,” even more than the 72% figure the Commission specifically criticized the last time around. CUB’s general counsel stated that ComEd has a responsibility to maintain its grid “in a way that benefits customers and doesn’t bankrupt them.” That’s the backdrop against which Exelon spent its earnings call bragging to shareholders about the very rate increase funding that plan.

It isn’t just the grid plan. Hidden in the same earnings materials is a separate $233 million reconciliation adjustment for ComEd, on top of the multi-year rate plan already in effect. At the same time, Exelon acknowledged that ComEd's data center pipeline declined from 43 gigawatts of projected demand down to 36, which executives described as “weeding out speculative projects.”

That matters because rapid load growth is one of the central arguments being used by ComEd to justify billions in new investment. If the demand forecast is going down, regulators should make sure ComEd’s spending goes down with it.

That distinction is especially important because it cuts against what ComEd’s own CEO told Illinois just three days before the earnings call. In a July 27 Crain’s Chicago Business op-ed, Gil Quiniones wrote that “ComEd does not generate power or own power plants, nor does the company profit from increases in supply price hikes,” with those costs “passed along on ComEd bills with zero markup.”

That may describe ComEd’s business model today. But it does not describe the future Exelon is now promoting to investors, where utility-owned generation and storage are presented as the company’s answer to the same supply challenges Quiniones says ComEd doesn’t profit from. Illinois customers deserve clarity: is ComEd simply delivering electricity with zero markup, or is Exelon positioning to own new generation assets and earn a guaranteed return on them? Exelon’s earnings call makes clear which direction the company is actually moving.

That should worry Illinois ratepayers. Utility-owned generation isn’t a public good ComEd can sell as a reliability policy. It’s a strategy to grow earnings for Exelon’s investors. The more ComEd spends, the more it earns in guaranteed profits, regardless of whether a cheaper, competitively priced alternative exists.

Unlike the competitive power generators and developers that must bear the risk associated with new power generation sources, a utility-backed project is built on the backs of families and small businesses. Once approved, the cost of the project is added to the rate base, where ComEd collects a return on it for decades. Exelon calls this “protecting customers.” It sounds more like “guaranteed profits.”

None of this means Illinois doesn’t have real grid needs. Demand from electrification, EVs, and data centers is growing, and the grid must be ready to serve it. But that does not mean Illinois ratepayers should be asked to fund every new revenue stream ComEd proposes, especially as consumer advocates already identified more than $1 billion in questionable spending.

The ICC’s 11-month review process exists specifically to test claims like these. Regulators should use it. Illinois ratepayers deserve a plan built for them, not one that answers to Wall Street every quarter.

• Holly Kim is the current Lake County treasurer and former state candidate for Illinois comptroller.