Complaint alleges ComEd violated state law by raising fees on customer
bills
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[September 06, 2023]
By ANDREW ADAMS
Capitol News Illinois
aadams@capitolnewsillinois.com
A group of businesses filed a complaint with state regulators last week
alleging that Chicago electric company Commonwealth Edison improperly
raised customer bills this summer.
The complaint – centered on a portion of the 2021 Climate and Equitable
Jobs Act that allows utilities to recoup carbon mitigation investments –
alleges the utility failed to follow the proper regulatory channels laid
out in Gov. JB Pritzker’s marquee climate policy.
The complaint was filed by the Chemical Industry Council of Illinois, a
trade group that lobbies for chemical businesses, alleging the change in
billing will cost its roughly 100 member companies about $100 million
combined between June 2023 and May 2024. Eight other groups are also
listed as complainants, including Loyola Academy, a suburban Catholic
school.
It's the latest salvo in the industrial sector’s opposition to elements
of CEJA. Other major business groups have long warned that CEJA could
result in increased energy costs, especially to large industrial
customers, which are among the biggest users of electricity.
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The Illinois Commerce Commission will consider the complaint, which
could set a precedent allowing the oversight agency to have tighter
control over how fees are calculated. All five of the commission’s
members were appointed by Pritzker.
The fee at the center of the complaint is the “Carbon-Free Resource
Adjustment,” or CFRA. The complaint alleges the fee was calculated
without proper oversight and asks the ICC to order ComEd to stop using
CFRA to recover costs and reimburse the complainants for any fees
already collected this year. ComEd began collecting money from customers
using CFRA in June.
While businesses filed the complaint, the CFRA charge appears on
residential customers’ bills as well. ComEd serves 3.8 million
residential customers and 400,000 non-residential customers, according
to data from the ICC. For residential customers, this fee currently
accounts for around 7 percent of total monthly bills, depending on local
taxes and electric usage.
The hearing process, which is overseen by an administrative judge, could
take up to a year unless the parties agree to an extension. The case
will then be decided by the five governor-appointed commissioners of the
ICC.
CEJA’s role
The authority to charge such a fee comes from a provision in CEJA that
provided subsidies to nuclear power plants in an effort to save three
aging plants from going offline.
The law outlined a program that allows the state to purchase energy in
bulk from three of the state’s six nuclear power plants at fixed rates
using a financial instrument called carbon mitigation credits, or CMCs,
which are then sold to electric utilities.
This guaranteed income was intended to entice Exelon, the then-owner of
Illinois’ nuclear fleet, to keep open several plants it had planned to
close. In early 2022, Exelon – which remains ComEd’s parent company –
spun out its nuclear generation arm into an independent company,
Constellation Energy. Constellation’s executive team is entirely made up
of former ComEd and Exelon executives and managers.
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Under the CMC program, if the actual market rate for electricity is
lower than the cost of CMCs, utilities can credit consumers for the
difference – something they did last year, saving the average customer
around $20 per month, according to a press release from Pritzker from
the time. If the market rate is higher than the fixed price, utilities
may add a charge to customer bills to make up the difference.
The complaint alleges that ComEd increased the CFRA charge to customers
in June to include a “clawback” of money that was credited to customers
last year in addition to compounded interest on those fees. This change
was outlined in a set of revisions to the legal document outlining how
ComEd calculates CFRA fees based on its “tariff” – the document that
defines what rates utilities can charge. These revisions were not
“suspended,” meaning the ICC held no formal hearings on the subject.
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![](../images/090623PIX/news_a1.jpg)
Commonwealth Edison’s Chicago North
headquarters is pictured in late summer 2023. (Capitol News Illinois
photo by Andrew Adams)
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In a May 2023 filing with the U.S. Securities and Exchange Commission,
Exelon told federal regulators and investors that ComEd lost $1.1
billion due to the CMC program between June 2022 and March 2023.
The fact that ComEd determined losses on its own, the complainants
allege, violated a provision of CEJA that requires those determinations
to be reviewed by the ICC in an annual proceeding.
“As a result of ComEd’s lack of disclosure of the real nature of its
filings of these tariff revisions with the Commission, no party had an
opportunity to object to the massive impacts of ComEd’s revisions,” the
complaint reads.
The business groups also allege ComEd’s maneuver violates the state’s
Public Utilities Act as an act of “imprudent management” of the Carbon
Free Resource Adjustment credits and charges.
“It was never reviewed, there were never any hearings on it, it’s a lot
of money and our position is that it violates the law,” Patrick
Giordano, a lawyer representing the business groups listed in the
complaint, told Capitol News Illinois.
ComEd has denied impropriety in its use of the adjustment and CMCs.
“We are appropriately charging and crediting customers and have been
clear about the CMCs and the charges and credits that implement them
with the Commission and our customers,” Shannon Breymaier, ComEd’s head
of communications, said in an email. “We’re still analyzing the
complaint, but expect to vigorously defend our actions in implementing
carbon mitigation credits.”
Constellation, which has attributed continued operations of three of
Illinois’ nuclear plants to the CMC program, signaled caution regarding
the program to its investors in a February regulatory filing with the
SEC. In it, the company noted that “regulatory or legal” challenges like
this were possible and that the company “cannot reasonably predict the
outcome of any such challenges.”
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CEJA’s other effects
The complaint is not the only matter before the ICC that will largely
define the strength of CEJA’s regulatory backbone.
The commission is currently considering sets of plans from both ComEd
and Ameren Illinois that set the utilities’ next four years of electric
rates, infrastructure spending and long-term plans for the electric
grid. These complex plans are the result of CEJA’s reforms to the
state’s ratemaking process.
The ICC is expected to approve modified versions of these plans before
the end of the year.
CEJA also opened the door for closer ICC oversight of utilities’ profit
rates and the energy sector’s environmental impacts. This has attracted
the attention of national and state-level advocacy groups.
Similarly, because of a requirement in CEJA, the ICC has requested all
large gas and electric utilities in the state offer discounted energy
rates to low-income customers. Consumer advocates are currently sparring
with gas utilities over the question of how steep these discounts should
be and who should be eligible for them in cases that are also expected
to finish before the end of the year.
Electric utilities are expected to file low-income rate design plans in
the coming years.
Capitol News Illinois is a nonprofit, nonpartisan news
service covering state government. It is distributed to hundreds of
print and broadcast outlets statewide. It is funded primarily by the
Illinois Press Foundation and the Robert R. McCormick Foundation, along
with major contributions from the Illinois Broadcasters Foundation and
Southern Illinois Editorial Association.
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