Chicago Mayor Lightfoot opens door for ComEd competitors in new electricity franchise agreement

For the first time in nearly 30 years, the city is releasing a request for information to evaluate potential alternatives to Commonwealth Edison for its electricity delivery.

The deadline to respond is a little over a month away—May 28—and is another roadblock for ComEd, which has been beset by a bribery scandal centering on energy legislation in Springfield. (Read the city’s RFI below.)

“Whether it is continuing to disconnect residents during the COVID-19 pandemic or recent rate increases, it is clearer than ever that we need an electricity franchise that delivers better results for our residents,” Mayor Lori Lightfoot said in a statement. “This RFI will enable my administration to secure the best deal possible for Chicagoans.”

Issuing the RFI today doesn’t necessarily mean ComEd is being locked out. “Instead, it serves as a due diligence effort to ensure the city ensures the best electricity franchise possible for residents and to consider how the electricity franchise fits into Chicago’s future,” the statement said. “After evaluating responses to the RFI, the city may choose to propose a new franchise agreement with ComEd, or it may consider additional steps to evaluate other franchise options and partners.”

The next steps will come later this year, including "proceeding to a request for formal proposals from potential franchisees or presentation to the City Council of a new negotiated franchise with ComEd that includes companion energy and equity provisions.”

The current franchise agreement, negotiated during Mayor Richard M. Daley’s administration in 1992, expired at the end of 2020. The conditions of that franchise will continue until a new deal is reached. 

"ComEd’s bribery scheme not only violated our trust, but harmed consumers through higher rates and broken promises," Abe Scarr, director of Illinois PIRG, said in the city statement. "Yet, ComEd continues to resist reform and public accountability at the city and state level. We applaud Mayor Lightfoot for exploring alternative options in the face of ComEd’s status quo of obstinance."

Any future city utility deal will include two parts, per Lightfoot: the franchise agreement itself and a new “energy and equity agreement” detailing “the ambitious consumer and climate goals the public utility and the city will achieve together.”

Lightfoot wants the next agreement to include “ways to reduce low-income residents’ electricity bills” and ways to “advance the city’s carbon reduction efforts.” Administration officials have also said they’re looking at a shorter contract than previous deals, possibly five or 10 years.

In a bullet-pointed letter she sent in September, Lightfoot wrote she also wants tiered collection policies according to customers’ ability to pay, elimination of late fees and shut-offs for nonpayment and a commitment to ending formula rate-making as a part of any upcoming state energy legislation. 

One solution likely off the list: the city taking over and running the electricity utility themselves. While pushed by some progressive aldermen and the Chicago Chapter of the Democratic Socialists of America, the administration essentially swatted down municipalization as too costly.

via Crain’s Chicago Business

April 30, 2021 at 11:36AM

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