Illinois electric rate relief heads to governor
Springfield, Ill. – After months of squabbling, lawmakers Thursday signed off on a $1 billion package aimed at softening the blow of high electric rates in Illinois.
The end couldn't have come sooner for downstate lawmakers who have been under siege from constituents, upset for months that their bills skyrocketed when a 10-year rate freeze ended in January.
"Is this perfect? Absolutely not," said Sen. Gary Forby, D-Benton. "But we don't want to get into the mess again we're in today."
Even as they sent Gov. Rod Blagojevich the deal that top Democrats negotiated with utilities, Republican legislators said it wasn't enough. Some questioned whether it really fixed the state's electric rate problems. Others warned consumers wouldn't stand for it.
"It will be wonderful when they get their $8 and $10 and $12 checks. They'll be so happy," Rep. Mike Bost, R-Murphysboro, said sarcastically. "Shame on all of us."
The relief plan doesn't roll back and freeze rates as some lawmakers wanted, allowing for more rate increases in coming years.
The plan instead gives rebate checks and bill credits that would roughly cut the price increases in half. The money would be spread out over the rest of the year, meaning small amounts for customers who avoided the worst of the prices increases.
The plan also would create a new state agency to oversee electricity prices and, in theory, keep future increases to more manageable levels.
"The passage of this bill into law will be a great day for the people of the state of Illinois," said Rep. George Scully, D-Flossmoor. "It has been a very long, painful road to get to where we are today."
The agreement's passage not only takes a burden off lawmakers, it could start movement toward the end of the Legislature's longest overtime session in modern history.
Downstate legislators held up votes on a new state budget until rate relief was approved. Now, they can focus on coming up with a spending plan that makes enough legislators happy to get them out of town.
A spokeswoman says the governor, who was not part of the negotiations, still has to review the plan before deciding whether to sign it.
If the plan becomes law, it would resolve one of the most explosive issues lawmakers have tackled in recent years.
The 10-year rate freeze was supposed to allow time for a competitive electricity market to develop in Illinois. Instead, few companies moved in and prices soared when the freeze ended. Some customers, particularly in central and southern Illinois, saw bills double or even triple and they demanded action.
The plan negotiated by Democratic leaders presented a difficult choice for Republicans: Support it despite their reservations and the opportunity to take political shots, or risk the fallout from voting against $1 billion for their angry constituents?
Many lawmakers of both parties had wanted to roll rates back to their old levels and freeze them again. That would have been worth more than $2 billion a year to consumers.
In the end, many Republicans decided to go along with the only deal available.
The agreement phases in rate increases over four years by giving customers discounts that slowly fade away.
Ameren customers will get at least $100 back this year on increases they paid, and many will see hundreds of dollars more. ComEd customers, whose increases weren't as high, will get about $80 back.
"This is going to bring their rates back to a level they can live with, a level that they can do business with," said Sen. John Sullivan, D-Rushville.
The funding comes from Ameren, ComEd and the power generators who provide their electricity.
The deal also scraps the auction process used last year to set the higher rates. A new strategy will be overseen by the new Illinois Power Agency, an independent body whose head is appointed by the governor. It will try to negotiate the lowest possible price for consumers on the market.
A condition of the agreement bars lawmakers from freezing rates for several years and requires Attorney General Lisa Madigan's office to drop several lawsuits against the utilities alleging fraud and collusion against consumers.
Republicans complained that giving up the lawsuits for a relatively small amount of money made no sense.
Some warned that constituents who begged for relief all year will take out their frustrations against Democrats over an unsatisfactory agreement and the ongoing legislative overtime session in next year's elections.
"Failure, failure, failure. This is what your party has come to stand for," said Rep. Ron Stephens, R-Greenville. "There will be a price paid."