Illinois utility Commonwealth Edison has agreed to pay a $200 million fine in relation to a federal investigation over bribery charges that have cast a shadow over its policy efforts in the state capital.
Friday’s deferred prosecution agreement filed in federal court will require ComEd to pay the fine and comply with regulations for three years. But the agreement, which is awaiting a court hearing date, will allow the 4.2-million-customer utility and parent company Exelon to avoid a criminal trial that could further expose details of its alleged wrongdoing to public scrutiny.
ComEd stands accused of steering jobs, contracts and payments to associates of Illinois House Speaker Michael Madigan in exchange for favorable treatment in the state legislature, including legislation related to rate increases, WBEZ reported Friday. Exelon Utilities CEO Anne Pramaggiore left the company in October, and top lobbyists have also left the company.
The scandal has cast a pall over ComEd’s relationship with state lawmakers and clean-energy advocates, and has stymied its efforts to move ahead with preferred legislation. That includes an effort to remove ComEd from the capacity market operated by mid-Atlantic grid operator PJM as a means of protecting its nuclear power plants from unfavorable pricing likely to emerge from the Federal Energy Regulatory Commission’s December decision to force PJM to impose minimum prices on a wide array of state-supported grid resources.
ComEd was able to convince some pro-clean-energy groups to include this “fixed resource requirement” proposal in a state bill called the Clean Energy Jobs Act, which combines a mandate for 100 percent renewables by 2050 with other policies pertaining to carbon reduction, electric transportation and job creation. That bill, along with a rival clean energy bill called Path to 100, failed to move ahead this spring during the state legislature’s emergency session, which was constrained by COVID-19.
Illinois’ Future Energy Jobs Act, passed in late 2016, qualified Exelon’s Clinton and Quad Cities nuclear power plants to receive hundreds of millions of dollars per year as zero-carbon resources. Nuclear power supplied roughly nine-tenths of its annual electricity supply, but PJM’s implementation of FERC’s minimum-price ruling could threaten the financial viability of the utility's nuclear power fleet, ComEd contends.
ComEd is also struggling to justify its $9.53 billion capital plan for 2020 through 2023, which will add more than $5 billion to its capital rate base and lead to price hikes for customers in future years, even as prices decreased slightly this year, a fact that’s drawn the ire of ratepayer watchdog groups.
Under a landmark 2011 state law, ComEd has spent $2.6 billion on a smart grid plan that has allowed it to install smart meters for all its customers and deploy distribution automation technology that improved grid reliability significantly over the past decade.
But the same law allows the utility to file its capital plans under formula rate updates that give the Illinois Commerce Commission little power to alter them, beyond reviewing the spending after the fact for impropriety or waste. ComEd had sought to extend this formula rate structure for another decade but was unable to pass that legislation amid its bribery investigation.
ComEd has argued that its capital plan is needed to continue to meet state policies calling for grid modernization and increased amounts of renewable energy. Roughly half of its annual $2.2 billion spending plan involves replacing aging power poles and lines and updating underground power cables. But the plan also includes more high-tech projects; funding totaling $370 million was allocated this year for infrastructure improvements such as LED streetlights and new substations to support data centers operated by companies attracted by the region’s relatively low-cost and carbon-free electricity, as well as access to state incentives passed last year.
ComEd also plans to spend about $100 million this year on expanding its existing volt/VAR optimization system, which uses smart-meter and grid-sensor data to fine-tune voltages across key circuits and add about 5,000 more automation devices to the 4,000 already deployed.