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ICC votes to hold ComEd financially liable for power outages

By: Julie Wernau |

The Illinois Commerce Commission voted 5-0 Wednesday to hold ComEd liable for the financial damages its outages cause to customers and towns.

Just because the weather is bad, doesn’t mean Commonwealth Edison can’t prevent many of the prolonged outages customers endure in summer storms, according to a decision handed down by the ICC. It’s the first time that the utility has been held liable for the financial damage those outages cause customers and towns.

The ruling follows two years of testimony related to six storms in 2011 that left vast amounts of ComEd’s customer base without power for sometimes days. It would force ComEd to reimburse consumers for spoiled groceries and to pay back municipalities for expenses incurred in overtime pay for emergency responders who deal with the lengthy blackouts.

The financial implications of the decision could be huge for ComEd, which has never been held liable under a law passed 16 years ago, intended to compensate victims by holding ComEd financially accountable for extreme outages, defined as those that leave more than 30,000 customers without power for at least four hours and could have been prevented.

The utility had argued that the outages were unpreventable and for the most part, the ICC agreed, waiving all liability for outages caused by broken tree limbs, wind and other weather-related issues. But the ICC also said that some of the outages could have been prevented.

In particular, the commission said that in a July 2011 storm that left more than 256,000 customers without electricity for more than 24 hours, 34,559 of those outages could not be explained away by weather conditions.

The prolonged outages led to so much spoiled food that some municipalities set up public Dumpsters throughout town so residents could dispose of the contents of their refrigerators and freezers.

In towns with downed wires, non-functioning traffic signals and fire hazards, municipalities paid a premium in overtime for police and fire firefighters who directed traffic around ComEd equipment.

ComEd says Wednesday’s decision could cost it $35 million in claims and litigation costs from customers and municipalities.

“That’s a lot of trials that can go on for years and obviously take a lot of resources to litigates those hard to handle claims, and I don’t see that it makes any sense,” said Thomas S. O’Neill, ComEd’s senior vice president of regulatory and energy policy and general counsel, according to testimony in the case.

A 2011 Tribune analysis of ComEd’s outages revealed that the utility has never had to pay out for such losses though at least 30,000 customers were without power for four hours or more on each of 26 days between 2003 and 2010.

The utility has consistently argued that such outages cannot be aggregated because they start and stop at different times and affect multiple pieces of equipment. No single piece of equipment on ComEd’s system affects more than 30,000 customers.

For instance, an, 2007, storm that left more than 630,000 without power did not reach the threshold, ComEd said. The utility broke the blackouts into 4,300 outages, none of which affected more than 30,000 customers.

Staff at the ICC called the argument “ridiculous.”

O’Neill told regulators that the utility should not be held liable for storm-related damage and that ComEd’s system for coding the cause of outages, which the ICC relied on to determine which outages were and were not weather-related, is not perfect.

“Everyone remembers the image of unbelievable cars stranded out on the street of Lake Shore Drive, and I do know that I’m not aware of anybody saying that city of Chicago should be liable for failing to plow the drive fast enough to prevent damaged that occurred there,” O’Neill said, according to a transcript of testimony in the case.

Attorney General Lisa Madigan’s office argued that the issue was not the weather but ComEd’s system, which it said was ill-maintained and plagued by overgrown trees.

The ICC rejected that argument and said ComEd is in compliance with a vegetation program that trims trees on a four-year cycle.