Watchdog: Smart Grid Legislation Put ComEd Over Public Good

(TNS) — Legislation at the heart of the bribery scandal that has ensnared House Speaker  Michael Madigan  as well as former Commonwealth Edison executives enhanced the utility’s bottom line but failed to produce promised benefits for consumers, according to a report released Tuesday by Illinois PIRG, a public interest advocacy group.

The watchdog report contends the 2011 smart grid legislation, which lawmakers enacted over then-Gov. Pat Quinn’s veto and then-Attorney General  Lisa Madigan’s  opposition, marked the “beginning of ComEd’s illegal scheme to increase its power and influence, in service of (parent company) Exelon’s interests over the interests of its customers and the people of Illinois.”

ComEd’s efforts to woo Madigan began when then- Senate President  Emil Jones , a longtime ally of the utility decided to retire in 2008, the report says.

Before that, then-CEO  John Rowe  viewed Madigan as a foe of the company, and the utility had reached a compromise on 2007 electric power legislation only because Jones fought to prevent Madigan from calling all the shots, the report said.

Jones’ departure put ComEd in a politically precarious position, the report said. So the utility “set in motion a campaign to build political power and win over Speaker Madigan,” a move that contributed to the passage of the 2011 smart grid legislation, the report said.

“We now know that one reason this campaign was successful was because it involved an illegal and corrupt bribery scheme to influence the speaker and his associates,” the report concluded.

ComEd agreed this summer to pay a $200 million fine as part of a deferred prosecution agreement with federal prosecutors for engaging in a “yearslong scheme” to influence Madigan by offering jobs and favors to allies.

On Monday, ComEd spokeswoman  Shannon Breymaier  said in a statement that the agreement with prosecutors “does not contain any allegations that consumers were harmed by legislation passed in Illinois.”

Breymaier also said that energy legislation passed over the past decade, including the 2011 law, “resulted in substantial benefits for ComEd’s customers, including reliability that has improved more than 70% since 2012 to record levels,” in addition to enhanced energy efficiency programs since the law took effect.

The 2011 law, known officially as the Energy Infrastructure Modernization Act, allowed ComEd and Ameren, Downstate’s major power company, to establish reliability standards and smart grid investments to improve delivery to customers.

But PIRG, in effect, charged that ComEd’s political clout helped influence legislation that ultimately made the measuring sticks for utility reliability too weak and the ability to make money too easy.

ComEd built an “unparalleled political influence operation” to pass smart grid legislation and repeatedly used it to “gain further windfalls” through legislative victories for ComEd and its parent company, Exelon, the watchdog report said.

In 2016, for example, ComEd, Exelon and a coalition of environmental and consumer advocates joined with nuclear plant workers to push through subsidies footed by consumers that helped keep open two Exelon plants.

Last year alone, the lobbying team for ComEd and parent company Exelon included nine former Democratic lawmakers, including two recent members of Madigan’s leadership team and the daughter of a former Cook County Democratic chairman. Also on the list was a former Madigan political director and two of the speaker’s former legal counsels. Several of those lobbyists have now parted ways with ComEd.

The report also took issue with ComEd’s contention that customers were not harmed by the smart grid law.

“ComEd’s authorized annual revenue, the amount it collects through the delivery portion of customer bills, increased 37 percent between 2012 and 2020, from an annualized rate of $1.95 to $2.68 billion, or more than $700 million,” the report said. “This 37 percent increase has unquestionably had, and will continue to have, a significant effect on customer bills.”

The PIRG report also takes issue with “formula rates,” which it contends have provided ComEd with “guaranteed, record profits” while also shielding the company’s investments from “meaningful scrutiny.”

In an energy agenda he rolled out earlier this year, Gov.  J.B. Pritzker  called for phasing out formula rates, which allow utilities to set annual rates based on anticipated costs. The governor’s plan contends formula rates have allowed utility providers to raise their delivery costs and their profits, “with little cost control.”

Madigan’s longest and closest confidant,  Michael McClain , a retired ComEd and Exelon lobbyist, and former ComEd and Exelon executive  Anne Pramaggiore , face federal indictments, as do two other lobbyists, for the alleged bribery scam that provided Madigan allies with contracts, jobs and other financial benefits, in some cases for little or no work.

Madigan has denied wrongdoing and has not been charged with a crime.

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