Press Release - Wednesday, February 28, 2007
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Lt. Gov. Quinn proposes Ratepayer Relief Act of 2007, ICC member recall vote
(SPRINGFIELD) -- To teach high-handed utility companies a lesson about trying to overcharge hard-pressed customers, Lt. Gov. Pat Quinn is backing the Ratepayer Relief Act of 2007 - legislation to roll back electric rates, repeal the so-called "reverse auction" system, and give consumers the right to recall Illinois Commerce Commission members
"Two giant utilities, ComEd and Ameren, need to learn the basics of fairness and consumer protection," Quinn said at a news conference Wednesday. "The Illinois General Assembly needs to pass the Ratepayer Relief Act of 2007 - roll back electric rates, repeal the reverse auction process, and let voters recall any ICC members who fail in their duty to protect consumer rights."
Quinn, who has led Illinois' battle against the electric rate increase, said ICC members must take responsibility for allowing Ameren and ComEd to inflict unbearable prices on consumers.
"It's no surprise when giant corporations put profits ahead of people," Quinn said. "But the people of Illinois have the right to expect ICC commissioners to stand up for consumers against corporate power and corporate greed. If they don't, the people should recall and fire them."
Quinn affirmed his strong support for HB1750, introduced by Rep. George Scully Jr. (D-Crete), that would roll back electricity rates to December levels and force Ameren and ComEd to give customers refunds on the increases in their post-freeze bills - plus interest.
Illinois' nine-year statewide freeze on electric rates ended on Jan. 1 of this year. Under the results of the deeply flawed "reverse auction" process - results that were unanimously approved by the Illinois Commerce Commission - basic consumer electric bills rose by 25 to 100% statewide in January. Under a little-noticed provision of the rate hike, "all-electric" households served by Ameren have seen their bills soar by as much as 200% to 300%.
In 1997, when legislators passed the statewide electric rate freeze, the General Assembly expected competition between electricity providers to result in lower prices for Illinois consumers when the rate freeze expired.
However, no real competition developed. The reverse auction process, proposed by ComEd, Ameren and the ICC, offered only an illusion of competition, as the electricity generation market is still controlled by only a handful of giant corporations. Not surprisingly, the reverse auction process ultimately resulted in soaring rates for consumers -- and astronomical profits for the utility companies and their wealthy parent corporations.
"Under this flawed reverse auction process, the biggest buyer of electrical power - ComEd - is owned by the biggest seller of electric power - Exelon," Quinn said. "It's not a true auction when the seller is making bids to itself. Without true competition, consumers should not be forced to pay these inflated prices. Ratepayers need the protection of a rate rollback.
"These giant utility companies were making record profits under the nine-year freeze," Quinn added. "Ameren's profits doubled, and Exelon/ComEd's profits increased by 320%," Quinn said. "Now they're making truly obscene profits -- and they're already talking about yet another rate hike in 2008. It's time for the Illinois General Assembly to stand up for consumers against corporate greed."
Quinn said he holds the Illinois Commerce Commission responsible for allowing ComEd and Ameren to inflict these unfair price hikes on ratepayers. To make sure that commissioners fulfill their responsibility to consumers - or take the consequences - Quinn said each commissioner should be required to stand in a retention election and give voters the opportunity to recall them.
"The ICC is supposed to balance consumer interests with the legitimate financial needs of the utility companies," Quinn said. "If voters believe these commerce commissioners have lost sight of consumers needs, as these skyrocketing bills suggest, then ratepayers should have the right to recall those unresponsive commissioners and send them packing."
Under existing law, the Illinois Commerce Commission's members are appointed by the Governor and confirmed by the Illinois State Senate, serve five-year terms, and may be reappointed by the Governor at their term's end.
HB1916, sponsored by State Rep. Mary E. Flowers, (D-Chicago), would require commerce commissioners to stand for retention or recall on the ballot at the first general election after their appointment. If a commissioner fails to win retention votes from a majority of voters, that commissioner will be recalled. Under HB1916, all four of the current members of the ICC would face the voters on the 2008 ballot, Quinn said.
"The Illinois Commerce Commission's decisions have a direct impact on the pocketbooks of every consumer in our state, every single day," Quinn said. "It only makes sense to make these commissioners accountable to the everyday people they are supposed to serve."
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