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Illinois Senate Approves ‘Smart Grid’ Bill, Rate Increase Expected

The Illinois Senate has approved ComEd’s ‘smart grid’ bill, with rate hikes expected to increase in 2014. The bill, which stemmed from a 2011 law passed to modernize the Illinois electric grid, was quickly passed through the Senate at a 44-9 vote. If approved by the House, the number of Senate votes will override the possibility of veto by Governor Pat Quinn, who is opposed to the bill.

ComEd will be able to raise $2.6 billion over 10 years through customer rate hikes, if approved. The funds will go towards digitizing the grid through operational changes as well as the installation of smart meters for all of ComEd’s 3.8 million customers. The utility giant has already installed 130,000 smart meters in a pilot project and would start installing the rest this year rather than in the rescheduled year of 2015.

Also under the bill, ComEd would be exempt from accountability of not meeting its investment schedule for a year after the bill’s passage. ComEd had delayed smart meter installations when the Illinois Commerce Commission (ICC) cut the funding that ComEd expected to receive. The utility had requested a $107 million rate hike, with the ICC approving $89 million.

ComEd and the ICC have been at odds with each other over a dozen rate interpretations and cost disallowances that ComEd says is costing it about $100 million in annual revenue. Nine other issues still need to be worked out between the two utilities, totaling to $35 million per year to ComEd. However, ComEd has stated that even if the legislation is passed, there are no plans of dropping the suit.

If passed, the average residential customer’s bill will increase about 40 cents in 2014, about 80 cents in 2017, and a full $3 within 10 years. Since the rate hike is distribution-related, all ComEd customers will see higher bills no matter if they are receiving their electric supply from ComEd or a retail electricity provider.

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