8/3/2007 3:17:00 PM Guest column Little worth celebrating in rate deal
By Rep. ROGER EDDY and Sen. DALE RIGHTER For the Daily News
Like most sports fans, we have a true appreciation and even admiration for gifted athletes. Over our many years of watching all types of sporting events, we've seen talented men and women make plays and set records that still, to this day, leave us wondering how they did it.
Having said that, one of the less-than-inspiring trends, particularly at the professional level, is what we refer to as the "self-celebration." By this we are not referring to the well-deserved and spontaneous reaction to winning a championship or making a truly great play. Instead, we mean the dance in the end zone after what should have been a routine catch by an overpaid wide receiver, or the adamant chest-thumping by a $3 million-a-year guard after making two free throws in a row. The kind of "self-celebration" that makes many of us think, "It really wasn't that good."
Much the same feeling swept over many of our colleagues and us after last week's statewide fly-around announcement of the electric rate relief package and legislation that followed later in the week.
At issue has been how to address the electric rate crisis that has created financial hardship for tens of thousands of consumers in downstate Illinois and consumed hundreds of hours in meetings at the Capitol. Since last fall, we have strongly favored a multi-year phase-in of any necessary rate increases. Such an approach would provide stability for everyone involved and give consumers the opportunity to adjust to increasing costs.
After months of closed-door meetings, Attorney General Lisa Madigan, House Speaker Michael Madigan (D-Chicago) and Senate President Emil Jones (D-Chicago) emerged and announced they had struck a deal with the electric utility industry that, among other items, contained $1 billion in relief for consumers. With barely a moment's pause this trio jumped into a state plane and spent Monday, July 23, on a statewide tour complete with press conferences, fancy banners, organized crowds, and grand speeches about the "great victory" over the utilities on behalf of consumers.
But as with so much that happens in politics and policymaking, the deal that was the subject of so much self-congratulatory rhetoric and travel at taxpayer expense required close scrutiny. That examination revealed some troublesome issues, such as:
The $1 billion in relief is spread over four years. But during the same four years utilities' revenues will increase by more than $9 billion just as a result of the Jan. 1 rate increases. And their revenue will go even higher if rates increase further, which is all but a certainty.
In order to get the utility industry to sign on, Madigan agreed to dismiss the lawsuits she has initiated against different players in the electric utility and generator industries. These lawsuits contained claims on behalf of consumers which, if successful, would have resulted in much more relief. Now those suits will never be heard.
Perhaps most bothersome, the deal did not legally mandate the payment of the $1 billion in relief or, for that matter, any payment. Rather, it merely "recognizes" that the utilities have agreed to make the payments. Why are they not required? Believe it or not, it's so the utilities can deduct the $1 billion from their tax liability, an option that would not be available to them if the payments were mandated by law.
The deal is surrounded by serious questions concerning connections and campaign contributions, such as the $45 million contract the Senate President's stepson enjoys with Commonwealth Edison, and the hundreds of thousands in campaign contributions he receives from that same entity and its affiliated companies.
Most Ameren customers will receive an average monthly credit of $10 to $15 in 2007, and that "relief" will be half of that in 2008. In 2009 and 2010 the relief afforded will likely be less than new rate increases, which this deal does nothing to prevent or limit.
In the end, this wasn't a great, or even, deal for our constituents. The utility industry will likely keep 90 percent of their increased revenue from the Jan. 1 rate increases, and what they do give back will be tax-deductible. We certainly all have an interest in the solvency and even profitability of the utilities. But judging from recent stories of ever increasing profit reports, more relief should have been forthcoming. The governor, as of this writing, has yet to sign off on this deal. If he decides against it we hope the plan we have promoted will receive consideration, which would provide for predictable and lower increases.
Either way, this was at best a mediocre effort for which a taxpayer-funded, self-congratulatory victory tour was neither earned nor well-received.
Sen. Dale Righter (R-Mattoon) represents the 55th District in the Illinois Senate. Rep. Roger Eddy (R-Hutsonville) represents the 109th District in the Illinois House of Representatives.