From the Peoria Journal-Star:

Utilities give $1million to politicians

Report suggests link to controversial rate-setting plan

Thursday, October 27, 2005
By Adriana Colindres
of Copley News Service
SPRINGFIELD - Illinois political candidates have received more than $1 million in campaign contributions since 2003 from electric utility companies that now are pursuing a controversial rate-setting plan, a new report says.

The top donor was Exelon and its subsidiaries, including Chicago-based Commonwealth Edison, which gave $535,400, according to an Illinois Campaign for Political Reform report being released today. Ameren and its subsidiaries, which serve much of central Illinois, took second place by contributing $504,200, the report said.

The top recipients of the money were Senate President Emil Jones, D-Chicago, who collected $219,400, and Senate Republican Leader Frank Watson of Greenville, who took in $163,250, according to the report.

The companies' "giving strategy" suggests they mainly want to block any potential changes to the state's 1997 electric restructuring law, David Morrison wrote in the "Power Markets" report.

"If those two (Jones and Watson) refuse to take action on electric utility reform, the 1997 law stays unchanged," wrote Morrison, project coordinator for the nonpartisan Campaign for Political Reform.

In recent weeks, there have been rumblings that the General Assembly might try to derail plans by ComEd and Ameren Corp. to use a "reverse auction" process to set electricity rates for business and residential customers starting in 2007.

A temporary rate freeze, which was part of the state's 1997 electric restructuring law, is to expire at the end of 2006. ComEd and Ameren view the power auction as a way to prepare for the next phase of what commonly is called the deregulation law.

Electric rates are expected to rise substantially once the freeze is lifted. Ameren, for instance, has said rates for its Illinois subsidiaries, including AmerenCIPS, AmerenIP and AmerenCILCO, could go up as much as 35 percent in 2007.

Gov. Rod Blagojevich and Attorney General Lisa Madigan oppose the auction plan and believe it would hurt consumers. Madigan has sued the Illinois Commerce Commission to prevent it from approving the auction proposals. Blagojevich in September replaced ICC Chairman Edward Hurley with Martin Cohen, who had been executive director of the watchdog group Citizens Utility Board.

Cohen's nomination still requires state Senate confirmation. A Senate committee could consider the nomination next week.

Critics of Cohen have questioned whether he could be an impartial member of the ICC when, as CUB's executive director, he strongly opposed the auction proposals. In late September, Ameren sent Cohen a letter asking him to disqualify himself from considering Ameren's auction proposal.

Cohen, who already has begun work at the ICC, has defended himself. He says he will fulfill the duties of his new job honestly and impartially.

CUB, meanwhile, this week asked the ICC to investigate and temporarily halt a television advertising campaign by a new ComEd-backed group called Consumers Organized for Reliable Electricity, or CORE.

CORE has been running TV commercials that suggest political meddling could result in "a California-style energy crisis" in Illinois, with electric rates failing to cover actual costs. That would jeopardize the reliability of the power supply, CORE says.

CUB executive director David Kolata accused ComEd of "fear mongering." The ads claim that Illinois consumers "are at risk of losing reliable electricity" because Illinois politicians are "advocating actions that could put our system at risk," CUB said.

But Barnaby Dinges, CORE's executive director, said the organization stands behind its ads.

"We think it's hypocritical and paternalistic of CUB to challenge our commercials," Dinges said Wednesday. "Part of the reason we exist is we think CUB doesn't talk enough about reliability (of electricity)."