The Illinois House of Representatives has passed a rate freeze extension bill that threatens ComEd's ability to deliver reliable electric service and will cost customers more in the long run, according to ComEd.
Following passage in the House, the bill moves to the Senate for consideration. If it passes into law, a rate freeze extension could cause ComEd to lose $1.4 billion annually -- or $4 million per day -- and put the company on the path to bankruptcy.
"Unequivocally, a rate freeze extension is irresponsible policy, illegal and threatens our ability to provide reliable service to our customers," said ComEd President Barry Mitchell. "While supporting this legislation is a politically popular decision, its passage will harm the very people it is intended to protect."
ComEd recognizes that rising electric rates is causing hardship for many customers. Although the problem appears to be most severe in southern Illinois, the company is committed to working constructively with the Illinois Commerce Commission and interested parties to resolve these issues.
ComEd has already taken a number of steps to help customers transition to new rates. Last summer, the company began an education campaign to inform its customers about higher rates that would reflect the real cost of electricity. Additionally, the company created CARE (Customers' Affordable Reliable Energy), a $40 million package including energy efficiency education and assistance programs for low-income customers, working families and seniors. An important component is the phase-in program, which allows customers to pay the increase over time.
"The vast majority of ComEd customers are dealing constructively with the transition to new rates by taking advantage of the programs available to help them," Mitchell said. "We will continue to work with all parties to identify new ways to help customers with the transition. But rate freeze legislation isn't the answer."
A rate freeze extension would put ComEd under extreme financial pressure and the company could be forced to curtail or limit certain operational expenditures, including storm damage repair, preventative maintenance and system expansion.
When Pacific Gas & Electric (PG&E) went bankrupt, customers were forced to foot the bill for $12 billion of PG&E's debt. Former Gov. Grey Davis bought more than $6 billion worth of electricity on behalf of failing utilities with taxpayers' dollars. And customers paid approximately $450 million of bankruptcy fees and expenses.