The Best They Could Do--For Whom?

By Senator Chris Lauzen

Question: When is a billion dollars of utility rate relief not really "One B-I-L-L-I-O-N Dollars"?

Answer: When typical customers receive only $8 per month of "reduced increase" in year one, less than that in year two, NOTHING after year three, and when you end up paying more than 20% per year more in the long run. 

The Ruling Majority in Springfield negotiated this bad deal for the rest of us, the bait was "one billion dollars", and the same people who have brought us the wasteful, pork-filled, and even embarrassing budget circus this year will now be in charge of buying residential electricity for the fifth largest state in the U.S.

There are good and bad Democrats, good and bad Republicans, but when the utility rate deal is eventually evaluated in its historical perspective, some simple facts will be remembered.  When Republicans were in charge and negotiated with the utility companies, they produced a 20% decrease in rates that were frozen for 10 years, and the companies enjoyed record-setting profits.  Now that Democrats control super-majorities, for practical purposes, in the General Assembly and can shove through whatever legislation they want, rates have increased 24% in Commonwealth Edison territory, increased more than 45% in downstate Ameren territory, utility companies profits are even higher, they throw us $8 per month of relief, and just wait until next year's rate hikes!

I realize that we need reliable energy and that Exelon, Commonwealth Edison, and Ameren spent, or should we call it "invested" $1,200,000 in political contributions over the past several years.  However, how can a majority of Democrat legislators point to their work without humiliation and vote for an average credit of $8 per month, after whopping 24% and 45% increases, when they know that at least one of the utility companies has enough money to pay their CEO more than $2,000,000 per month--that's every 30 days, $2 million bucks--and can pummel us with self-serving television and radio ads telling us why the huge increases are necessary?  I have personally reviewed their financial statements and they are making more money than ever.  Profits are a good thing, unless they are generated through monopoly-control and come at the expense of people struggling to pay medical bills, runaway property taxes, and other everyday living essentials.

But, they say it's the best they could do.

Every knowledgeable party seems to know that these utility rate hikes are a lucrative deal for the corporations...and a bad deal for customers. Wall Street knows it--stock prices went up the day that Senate President Emil Jones, House Speaker Madigan, and his daughter Attorney General Lisa Madigan flew around the state to announce that consumer-protection lawsuits by the government were being dropped and the deal was cut.  Were these suits real grievances or just bargaining leverage? 

Utility company executives, lobbyists and accountants know it--the Springfield Journal Register ran a front page picture of their celebration, at our expense. Ameren Corporation just announced this week that their first six months' 2007 profits increased 38% over last year's to a staggering $266,000,000--a quarter of a billion dollars of after income tax net profits for only 180 days worth of operations. 

Crain's Chicago Business knows it--on June 23, 2007, they ran an article titled "Big Payday for Exelon Investors."  Incredibly, they reported, "Exelon Treasurer Michael Metzner told an investor conference earlier this month that the company expects to have $8 billion available over the next five years to repurchase its own shares...the buyback reflects surging profits...Exelon is waiting to unveil its plan until after the controversy over the electric rate increases is settled."  This is called an embarrassment of riches.   

The polite way to assess this situation is that it sure seems like the Ruling Majority and the utility companies are taking advantage of us.  They say that it was the best that they could do...but for whom? 

My constituents' reactions to $8/month have ranged from "You must be kidding" to "No way" to "That's just two gallons of gas per month" to "This is like a class action lawsuit settlement where the injured mass of victims get a free pass to a movie matinee or a cup of coffee, and millions of dollars go to those managing the lawsuit process.  

The "freeze" was better and I voted for it.  Senator Randy Hultgren and I voted "No" for the utility rate bonanza scheme along with area Representatives Pat Lindner, Tom Cross, Mike Fortner, and Randy Ramey.  Tim Schmitz was an excused absence.  Area Senators Linda Holmes and A.J. Wilhelmi joined Senate President Emil Jones (with his media-reported connections to ComEd) and voted "Yes" along with area Representative Linda Chapa LaVia.

I remember how surprised and disappointed I was ten years ago when part of the electrical energy deregulation plan included $1,000,000 of operating funds for the Citizens Utility Board (C.U.B.).  I hope that no similar "concession" was used this year to secure acquiescence from this unbiased source of information and assistance. 

Sometimes negotiators' best is just not good enough.