ComEd petitions court to rehear case

By Julie Wernau
Posted Oct. 22, 2010 at 3:21 p.m.

Commonwealth Edison is asking the Second Appellate Court to rehear its case following a decision earlier this month that removed the funding mechanism ComEd was using to pay for a smart grid pilot program in the Chicago area.

The decision also overturned a precedent the Illinois Commerce Commission has used for years to determine how much consumers pay on utility bills, a change that would mean an annual revenue loss of tens of millions of dollars for ComEd’s parent, Exelon Corp. and possible rebates for consumers.

The court has not decided if or when it will rehear the case.

The utility also has the option to appeal to a higher court before Nov. 4. In the meantime, they’ve asked the ICC to consider wrapping the cost of the pilot program into the regular rate case — the proceeding that determines how much customers pay on their electrical bill.

In its petition for a rehearing, filed Thursday, ComEd argued that the court was wrong to say that the commission overstepped its authority in 2008 when it allowed a $5 million rider to be tacked on to customers’ bills to pay for the pilot, which is testing smart grid technology in nine local communities. The ICC was closely monitoring the costs and justifications of the pilot to ensure that ComEd could not abuse the rider to improperly increase its own bottom line, the utility argued.

ComEd said the ICC approved the rider for the pilot because it was following federal and state policy aimed at modernizing the electrical grid. Congress has recognized that utilities, on their own, have little incentive to invest substantially in smart grid technology, meaning that a financial incentive for utilities is crucial to smart grid deployment, ComEd said in the court filing.

The utility also asked to court to rehear another aspect of the case that relates to how the depreciation is factored into a rate case.

In setting rates, utilities use a 12-month period, referred to as a “test year,” to determine the costs a utility has incurred to deliver electricity to consumers. Those costs include the value of distribution lines and equipment — subtracting for depreciation. But the law also allows ComEd to include investments that occurred after the test year if they are significant enough to affect their rate case. In the 2008 rate increase the exception added six months to the test year, but the ICC did not account for the depreciation of ComEd’s assets for those six months.

In its request for a rehearing, ComEd the ICC’s decision was not “unreasonable or arbitrary,” and was based on a long-established precedent aimed at “some cost recovery for the utility when it is needed the most — at the time the investments are made” while also “offsetting the inherent time lag in recovering an investment” that results from the long review process for setting utility rates.

ComEd’s parent, Exelon Corp., is looking at an annual revenue loss of $77 million from that aspect of the court order, and a likely loss of $85 million in its current request for a $396 million rate increase.

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  1. Doc Safety Oct. 22, 2010 at 1:41 pm

    Com Ed has been depreciating its lines for years to a point that consumers should no longer have to pay for the depreciation. Com Ed’s service department is worse than any other utility. They out callers on hold for tens of minutes and then transfer them to another person where one is on hold for another bunch of tens of minutes. I agree totally with the courts on their recent decision. ComEd needs to show how it’s efficiency has improved over the last 10 years and if not then it needs to fix it like we’ve all had to do on our jobs.

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