It’s time to clean up pay-to-play in Springfield, starting with ComEd

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And yet, even as that nightmare of a corporate scandal was laid out in painstaking detail by U.S. Attorney John Lausch, ComEd’s parent company, Exelon, was having a fantastic day in the market.

The energy giant was one of the biggest gainers on the S&P 500 that Friday, its market cap jumping 3.5 percent to $38.39 billion.

With that kind of salve, you might consider taking a hit like that, too.

Clearly Wall Street dismissed the gravity of the charges and instead applauded the slap on the wrist that ComEd received for an alleged pattern of corporate bribery.

That’s not even two minutes in the penalty box—for roughing up ratepayers.

As one smart Chicago leader would remark later: "It’s behind them now and they all had a nice day in the market.”

If you’re saying to yourself that $200 million is chump change compared to what the utility has made in terms of favorable rate hikes that now deserve even more scrutiny in the wake of the appalling charges laid out by Lausch, you’d be right. Except, guess who the chumps are in this scenario?

So consider this a starting point, and let’s immediately begin hearing where reform goes from here. This is not the time for baby steps.

Cleaning up the pay-to-play in Springfield once and for all means that market forces start to take over from where the corruption ends. And that benefits everyone, including, believe it or not, ComEd, in the long run.

As our Steve Daniels reports, Gov. J.B. Pritzker is taking the first step by opposing extending the "formula rate" system—the 2011 Energy Infrastructure Modernization Act, which determines the utility’s rates each year based on a formula rather than by state regulators who would have authority to set rates based on a thorough review—when it is up in 2022.

"The governor is deeply concerned with ComEd’s admissions of wrongdoing, and, as he said earlier this year, the time of utilities writing the energy policy for the state of Illinois is over," a spokesman for Pritzker told Daniels.

While we applaud the governor’s stance on this, much more needs to be done to level the playing field for businesses and consumers who bore the brunt of a rigged system for years.

We should also, as Better Government Association President David Greising suggested last week, go back and look at the key 2016 legislation that favored ComEd and Exelon. Specifically, how much of the legislation committing ratepayers to help subsidize two downstate nuclear plants owned by Exelon to the tune of $2.4 billion can be traced to ComEd’s scheming in Springfield?

Additionally, much more needs to be done to make sure there is transparency in how ratepayer funds are used.

Illinois, for example, is still one of the few states that lets ratepayers subsidize charitable contributions utilities make. In the past, some of those organizations have testified on ComEd’s behalf when it’s lobbied legislators in Springfield, Crain’s has reported.

Many other reforms may be put on the table starting this week when the Illinois Commerce Commission begins hearings on the ComEd mess. All should finally be taken seriously by lawmakers.

Unfortunately, it was clear last week that we have a long way to go.

House Energy Committee Chairman Ann Williams, D-Chicago, did her colleagues no favor when she rejected calls for public legislative hearings on the ComEd bribery scandal. Her reasoning was a bit hollow for us. "A legislative committee is not the appropriate place to investigate a criminal matter currently under the jurisdiction of the U.S. attorney’s office," Williams said.

Never mind that ComEd had already confessed to the Springfield shenanigans laid out in the delayed prosecution, as political columnist Greg Hinz pointed out.

Also noted later in Hinz’s story was an all-too-familiar scenario: Williams is the lead sponsor of the proposed Clean Energy Jobs Act, which would in fact help subsidize nuclear power plants owned by . . . you guessed it—Exelon.

The hits just keep on coming.

 

 

 

 

 

26-Delivered

via Crain’s Chicago Business

July 24, 2020 at 04:29PM

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