ICC Rejects ComEd’s Smart Grid Fee Hike Request

The Illinois Commerce Commission (ICC) on Tuesday rejected a request by Exelon Corp.’s energy delivery arm ComEd to charge customers for several smart grid initiatives, including advanced meter deployment. The commission, however, approved ComEd’s request to collect an additional $155.7 million–a 7.6% increase over current revenue—through new delivery rates.

ComEd has asked the commission for approval to immediately recover costs from customers for several projects based on set budgets. The projects included an urban underground facilities reinvestment, an electric vehicle initiative pilot program, low-income assistance program, and in future years, investments including an advanced meter deployment.

But in docket 10-0527, the commission rejected the budget-based “alterative” to traditional rate reviews and shunned ComEd’s proposed Rate Accelerated Customer Enhancement Pilot. The petition did not comply with requirements of the Public Utilities Act, the commission said. “Commissioners expressed concern that the mechanism to pay for the projects would be an additional cost on top of the rates customers currently pay for delivery service.”

The decision follows a Sept. 30, 2010, ruling by the Illinois Appellate Court, Second District, which overturned a previous ICC decision to allow ComEd to recover costs of exploring grid modernization through smart grid technologies. Last October, in response to the court decision—which had created “uncertainty” and made it difficult for the firm to fund smart grid technology—ComEd filed a petition with the ICC to complete a scaled-down version of its smart meter pilot program. Smart meters have been installed in more than 120,000 Illinois homes.

ComEd told NBC Chicago that it opposed the ICC’s decision on Tuesday because it needed the full rate increase to modernize its system. "Since the last rate case three years ago, ComEd has invested substantially to enhance its system and run its business, and also has cut costs substantially to maintain financial health and manage costs to consumers. ComEd had filed for this rate increase to recover the costs of making these investments and to continue maintaining a reliable electric delivery system," the company reportedly said.

The company also reportedly plans to move forward with a legislative proposal to increase investments in the Illinois grid by $2.6 billion over the next decade. The bill, titled the “Energy Infrastructure Modernization Act,” will reduce outages and power disruptions, ComEd has said. Illinois’ House is expected to debate the bill this week.
Sources: POWERnews, ICC, NBC Chicago