Ameren (NYSE:AEE) subsidiary Ameren Illinois will appeal to the Illinois Legislature to override Governor Pat Quinn’s veto of Senate Bill 1652, a spokesperson for the company told this news service.
S.B. 1652 “would enable us, over a 10-year period, to improve and modernize the electric distribution system, bringing it into the 21st century,” Ameren Illinois spokesperson Leigh Morris said. The bill would create 450 new jobs within Ameren Illinois’ service territory and have an economic impact throughout Ameren Illinois’ 85-county service territory, he said.
Quinn on Sept. 12 vetoed the bill, stopping the state’s electric utilities from “imposing billions in rate hikes,” the governor said in a statement. The bill now goes back to the General Assembly, which will consider it during the veto session that begins on Oct. 25.
The bill’s stated purpose is to allow the implementation of smart grid technology, which Quinn and others support in concept as part of an overall strategy to make Illinois a leader in the clean energy economy. However, the statement added, the bill puts a burden on consumers, who are not getting the service quality they are paying for each month.
According to Quinn’s statement, the legislation would weaken the Illinois Commerce Commission’s oversight ability to rein in excessive rate increases that will burden consumers and harm seniors, minorities and low-income households.
The bill would allow utilities to benefit from unnecessary costs, higher corporate profits and flawed performance standards, according to Quinn’s Sept. 12 veto message to the state Senate. For instance, the bill ties utility profits to the number of outages they can avoid each year, but excludes the nine worst storms from this calculation. As a result, the bill rewards unacceptable service, the governor said.
“More than 1.5 million people and businesses have had to deal with power outages and services disruptions this summer,” Quinn said in his statement. “Now these same utilities are trying to change the rules to guarantee themselves annual rate increases and eliminate accountability. I will not support a bill that contains sweetheart deals for big utilities, which could leave struggling consumers to pick up the tab for costs such as lobbying fees and executive bonuses. We can ensure innovation and investment in our electric grid, and create new jobs, without compromising core safeguards for Illinois consumers.”
Morris, however, said the bill will save customers money as well as improve reliability, allow the implementation of a variety of smart grid technologies, including the installation of approximately 750,000 smart meters, giving customers access to time-of-use and demand response services.
In his veto message, Quinn encouraged the General Assembly to consider a plan, filed as House Amendment 3 to House Bill 14, which he said represents a good faith effort toward modernizing the grid, reforming the regulatory system, and protecting ratepayers.
The enrolled version of S.B. 1652 notes that by Jan. 1, 2012, a participating utility is to invest over five years about $1.1bn in electric system upgrades, modernization projects and training facilities, and over 10 years about $1.5bn to upgrade and modernize its transmission and distribution infrastructure and smart grid electric system upgrades, including additional smart meters and distributed automation. Furthermore, capital investment costs incurred by a participating utility should not exceed $3bn, according to the bill.
State Sen. Mike Jacobs, who sponsored the bill, said Sept. 14 that the total build-out noted in the bill is $3bn over 10 years. “The increase will ensure that we have reliable, predictable power and frankly, right now, we don’t have that,” he said. “We just have power and if your lights go off, the company doesn’t know your lights are off. This is a grid that was built in the early 1900s and it’s time to build a new one.”
Jacobs added, “You can’t have champagne on a beer budget. That’s what the governor wants – beer – and Illinois needs champagne.”
A representative for Exelon (NYSE:EXC) subsidiary Commonwealth Edison, which has operations in Illinois, did not return a call for comment as of press time.