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Get ready for two more years of electricity rates set by formula

By: Steve Daniels |

Legislation for a two-year extension of the formula delivery rates that have helped increase electricity bills in the Chicago area is expected to fly through the Legislature during the fall veto session that got under way today.

The House Public Utilities Committee voted 19-0 today to move the bill, and floor action in the House is expected later today.

The formula push is supported by Ameren Illinois and Commonwealth Edison.

The measure is a big priority of downstate utility Ameren, which has been slower to roll out the infrastructure improvements and associated delivery rate hikes authorized by the 2011 smart grid law than ComEd.

ComEd is well into its $2.6 billion grid modernization effort, which includes the installation of smart meters in all homes and businesses in its service territory. This year, ComEd hiked delivery rates by $340 million, raising the average household electricity bill by $5.50 per month. Next year, it’s asking the Illinois Commerce Commission to raise rates another $269 million, which would add another $3 per month to the average bill.

The law gives the ICC relatively little latitude to significantly alter the rate requests.

At a hearing today before the House committee, consumer advocates argued that it’s premature to extend the law now, since there’s still time to assess the benefits from the upgrades before 2017. But Ameren and unions representing its workers said the bill was needed to give bond investors financing Ameren’s infrastructure program comfort that it would be able to collect the higher rates needed to pay for it.

ComEd also enthusiastically backed the measure at the hearing.

It’s unclear whether outgoing Gov. Pat Quinn, who vetoed the smart grid bill in 2011 only to see his veto overridden, will sign the bill. But it’s expected to garner veto-proof majorities.