Mike Messenger, Ranjit Bharvirkar, Bill Golemboski, Charles A. Goldman, Steven R. Schiller
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Springfield, Ill., May 6, 2010 – Over the last few weeks, Commonwealth Edison Co. and parent company Exelon have been in discussions with state leaders about a public/private partnership to address critical energy supply and electric infrastructure issues, as well as broader economic concerns facing Illinois.
ComEd and Exelon had put together a draft proposal for the state’s consideration that would have offered Illinois $500 million toward the state’s budget deficit in exchange for a guarantee of future profits on electricity rates.
Illinois Gov. Pat Quinn, a Democrat, said he would review the proposal May 5, but ComEd’s communications department said May 6 that the companies have withdrawn their proposal, citing a lack of support from elected officials in Springfield.
Illinois currently has a budget deficit of about $13 billion.
Consumer advocates said the proposal would have caused customers to pay more for electricity, and some public officials also voiced their opposition to the idea.
The state’s attorney general, Lisa Madigan called the proposal an attempt to lock in unjustified profits.
“It is my job to protect utility customers from excessive rates. I will not support any proposal that forces ratepayers to pay more than they should for electricity,” Madigan said in a statement.
ComEd and Exelon claimed in a press release that the public-private partnership would:
* Provide $500 million to the state general fund to support critical, at-risk state programs affecting millions across the state.
* Cap residential and small commercial customers’ total rate for the next four years. (If electricity wholesale prices drop in the next four years, customers could alternatively seek better rates from competitive suppliers.)
* Enable $1 billion in needed infrastructure investment to make the system more reliable and energy efficient, while supporting thousands of jobs.
* Enable the construction of a new regional job training center to help train tomorrow’s labor force.
* Create a long-term power agreement to keep rates stable through June 2017.
Tabrina Davis, Vice President of ComEd communications, said the plan would have provided funds to a state in turmoil, provided more than 2,000 jobs, invested more than a billion dollars in grid modernization and infrastructure improvements.
It also would have provided customers with rate stability while preserving the right to choose market-based rates. No customer would have been required to pay above market rates, Davis added.
“In last few days, however, it has become clear that there is not enough support in Springfield to continue pursuing this course. We acknowledge and respect the concerns many public officials have and will move on.
As a proud Illinois-based company, employing thousands of Illinoisans, ComEd remains committed to be being a positive contributor to the well-being and economic revival of our state,” Davis said in a press release.
Exelon delivers electricity to about 5.4 million customers in northern Illinois via ComEd and southeastern Pennsylvania via PECO, as well as natural gas to 486,000 customers in the Philadelphia area via PECO. Exelon has its headquarters in Chicago.
ComEd, an Exelon unit, provides service to about 3.8 million customers across Northern Illinois, or 70 percent of the state’s population. The company’s revenues total more than $15 billion annually.