ComEd Facing Rate Freeze Extension?

On Sunday, the Illinois House of Representatives passed a rate freeze extension bill that will now go to the state Senate for consideration. The bill's approval by the Senate would mean that ComEd customers would avoid the 24 percent rate hike that took effect Jan. 1 after a decade-long state freeze on electricity rates expired.

In response to the House's passage of the bill, ComEd released a press release, saying that extending the rate freeze was bad for customers and could lead to bankruptcy for the company.

"Rate freeze extension legislation doesn't change the fact that the cost of electricity has increased over the past decade, and ComEd's cost to buy power has increased," the company said in the statement. "This bill would prevent ComEd from recovering its costs to buy power to serve its customers or to invest in its electric delivery system. It forces ComEd to 'buy high and sell low,' and will have a similarly devastating impact as the 2001 California energy crisis."

Late in 2006, the Illinois Commerce Commission approved ComEd's residential rate stabilization plan, which the company says allows residential customers the choice to pay for the rate increase over time, limiting the impact of any rate increases to 10 percent annually for the next three years and repay the deferred amounts, with a below-market interest rate of 3.25 percent, from 2010 to 2012.

According to The Chicago Sun-Times, the new extension bill proposed by the House faces an uphill fight in the Senate. Senate President Emil Jones expressed disdain for extending the freeze and, through his spokeswoman, repeated his support for the rate stabilization plan. Given his negative view of the bill, it's unlikely it will come up for vote in the Senate this week.

For more on this developing story in Illinois, check out the Sun-Times article Outlook dim for House bid to block ComEd hike.