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ComEd Pledges to Create 2K Green Jobs in Chicago

Posted on May 5, 2010

Commonwealth Edison Co. has an extraordinary offer: $500 million upfront to the state of Illinois, plus a pledge that the electric company will create 2,000 green jobs in Chicago through the development of a more efficient smart grid for electrical transmission.

But the power company says the deal is only good if they get to lock in their rates and profits.

Illinois has found itself mired in an unprecedented financial crisis as of late.

According to the Chicago Tribune.com, lawmakers are calling it an indecent proposal, questioning whether ComEd thinks they’re so desperate they’ll take cash to keep consumer electric bills artificially high.

“I think whenever the state finds itself in a situation where a private interest can put a price tag on favorable treatment, it’s a bad way to conduct business,” said Rep. John Fritchey, D-Chicago, who added that the proposal “raises a lot of red flags.”

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Some lawmakers said privately that the Democratic leaders of the legislature had ruled out the offer.

The idea is a last-minute addition as lawmakers look for an easy way to get free money to help close a massive budget deficit and escape Springfield by Friday to begin their re-election campaigns. To some leading lawmakers, ComEd’s proposal is as politically unpalatable as voting for an income tax increase because it would lead to Chicago-area customers paying more for electricity.

ComEd and its parent company, Exelon, made the pitch to Gov. Pat Quinn’s office, seeking a four-year freeze on residential and small- business electrical rates. While the utility called it a plan to “stabilize” rates, consumer advocates noted that electrical demand has declined in recent years and that a rate freeze could mean electrical customers paying higher-than-market rates.

After the four-year rate freeze, ComEd then seeks an automatic annual 10.3 percent profit margin, bypassing state regulators. That means consumers would pay higher rates if profit levels fell.

In addition to the $500 million upfront, ComEd is promising to commit $1 billion over 10 years to develop a more efficient “smart grid” for electrical transmission and other projects that would create 2,000 “green” jobs lasting between two and 10 years.

In documents obtained by the Tribune, ComEd called the plan a “public-private partnership” that would help ease “the brunt of the recession” on Illinois residents facing “the state’s low level of economic development, high unemployment and difficult budgetary challenges.”

But the proposal also would largely render moot the work of the state’s utility-rate-setting Illinois Commerce Commission by guaranteeing the firm a rate of return.

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