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Illinois Ushers in Smart Grid with New Legislation

State legislators approved rate hikes for Illinois electric customers by overriding Gov. Pat Quinn’s veto of a “smart grid” bill that funds the utilities’ investments in the state’s aging electric grid.

The override allows the state’s two largest public utilities, Commonwealth Edison Co. (ComEd) and Ameren Illinois (Ameren), to increase delivery rates to fund the upgrade of the grid without having to gain approval from the Illinois Commerce Commission (ICC), which regulates the state’s electric and natural gas utilities. The Senate voted 36–19 and the House voted 74–42 to override Quinn’s veto. The veto-proof supermajorities can’t be overridden.

The legislation will allow ComEd and Ameren to underwrite a planned $1.5 billion modernization of the state’s power grid, including the installation of “smart meters” in all homes and businesses in the utilities’ service territories.

The utilities had faced opposition from Quinn, Illinois Attorney General Lisa Madigan and consumer groups in the state who criticized the bill for representing little more than a money grab for the utilities and their stakeholders. Quinn vetoed the $2.6 billion measure in September because it gave the electric utilities permission to raise electric rates by a guaranteed minimum of 2.5 percent each year for the next two years and lock in a 10.25 percent yearly profit rate, with no cap. The bill provided for only minimum annual rate increases over the next decade, not maximums, Quinn said.

The bill was initially approved in May but failed to receive a veto-proof three-fifths majority in the Senate and the House.

According to ComEd and Ameren, the improved electric grid funded by the legislation will mean no more meter readers, no more having to call the electric utility when the power goes out and, when the power does go out, outages will be more localized and shorter in duration.

The statewide smart grid build out is scheduled to begin next year and take 10 years to complete. During that time, ComEd said it will charge its customers an additional $3 a month and Ameren said it will charge its customers an additional $3.40 a year.

The rate increases will affect the delivery portion of utility customers’ bills, which means all electricity customers in the utilities’ service territories will have to pay the increased rates, regardless if they buy their electricity from the utilities or from an alternative electricity supplier. Customers can help offset the rate hikes by increasing their energy efficiency and shopping around for better electricity pricing plans from suppliers like Spark Energy.

Sources

“Legislature Overrides Gov. Pat Quinn’s Veto to Allow Smart GridChicago Tribune, Oct. 27, 2011.

“Quinn Vetoes ComEd Rate HikeChicago Tribune, Sept. 12, 2011.

“House OKs ComEd Hikes, but Quinn Veto PossibleChicago Sun-Times, May 31, 2011.

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