City of Chicago officials on Thursday indicated they plan to sign a new deal with Commonwealth Edison for providing electricity to city residents, despite the utility’s role in a high-profile federal corruption scandal.
But one of Mayor Lori Lightfoot’s chief critics in the City Council raised questions Thursday about whether ComEd is legally eligible to do business with City Hall, given the utility’s role in a bribery scheme connected to powerful House Speaker Michael Madigan.
Negotiations over a new franchise agreement with ComEd have been happening weekly behind closed doors for the last year, and continued even as federal prosecutors honed in on the public utility as part of a sprawling investigation involving state lawmakers and lobbyists. The franchise agreement is a contract that allows ComEd to continue supplying electricity to Chicagoans.
“While there are a number of substantive issues that require further discussion, we’ve made progress on modernizing the agreement,” Commissioner David Reynolds told aldermen on the Committee on Environmental Protection and Energy Thursday.
Activists and some aldermen have been pushing Mayor Lori Lightfoot to cut out ComEd and create a city-run electric utility. City officials hired a third party to study what that would take, and while that study has not been released, Reynolds said at the hearing that the move is “not financially feasible for the city.”
ComEd has estimated that it could cost at least $5 billion and maybe as much as $10 billion for the city to buy up all of its electric infrastructure in order to take over for the utility.
On July 17, ComEd and federal prosecutors announced the company had agreed to a $200 million fine as part of a deferred prosecution agreement to settle a long-running criminal probe into ComEd’s contracting and Springfield lobbying practices. The company admitted it had perpetrated an eight-year-long effort to win influence with “Public Official A” – a clear reference to Illinois House Speaker Michael Madigan, the state Democratic Party boss from Chicago.
In exchange, federal prosecutors say ComEd won favorable government actions from Springfield lawmakers – including rate increases.
Reynolds said that since news of the scandal broke, City Hall “suspended further franchise agreement negotiations” with the utility so the city could review its options.
“Commonwealth Edison has let us down before, but this time ComEd let down consumers in a spectacular fashion and as far as I’m concerned … paying a $200 million fine is getting off easy,” said Ald. Brendan Reilly, 42nd Ward. “You have a lot of work to do rebuilding trust with consumers and that does not mean launching a multimillion-dollar advertising and PR campaign to repair your brand.”
During the day-long hearing Thursday, ComEd CEO Joseph Dominguez apologized for the conduct outlined in the deferred prosecution agreement and vowed to work toward rebuilding trust with Chicagoans.
“Our relationship with this city is vitally important to us,” Dominguez said. “We’re going to do our best to be completely transparent and answer all of your questions today, and to ensure that we are committed to the values that you hold dear.”
Ald. Raymond Lopez questioned whether the city is in violation of its own municipal code by doing business with ComEd. He cited a section that says a person or business is ineligible to do business with the city if they’ve admitted guilt through “any civil or criminal proceeding” and lists bribery as one of the crimes.
Through its deferred prosecution agreement with prosecutors – essentially, a settlement of the feds’ criminal case – ComEd “admits, accepts, and acknowledges that it is responsible” for the bribery scheme carried out by its employees.
But they will not be prosecuted for bribery and the charge will be dropped in three years if the utility pays its fine and complies with oversight regulations.
Dominguez said the company was “certainly mindful of that provision” when ComEd negotiated with federal prosecutors.
“I would hope that you negotiated an agreement that doesn’t put you out of business or puts Chicagoans at risk of not receiving power,” said Ald. George Cardenas, chair of the Committee on Environmental Protection and Energy.
During the day-long hearing Thursday, aldermen grilled ComEd executives and city officials, like Reynolds, about how the two parties will move forward in the wake of the corruption scandal.
Mayor Lori Lightfoot has said she wants to see ComEd commit to her priorities around “energy and sustainability, equitable economic development, utility affordability and transparency.”
Reynolds said the city’s franchise agreement negotiations will likely extend past the end of this year, when the current agreement ends. When it ends, the terms will continue until a new deal is in place.
“All the conditions still hold,” Reynolds said. “We’ve dealt with them for 30 years. They’re not the greatest, but another year, 18 months, whatever that number is… We’re going to be okay.”
Several aldermen are still urging the mayor and city officials to reconsider doing business with ComEd.
“This is clearly not a healthy relationship,” said Ald. Andre Vasquez, 40th Ward. “We’re trying to say, ‘We don’t like the agreement. We don’t like the negotiations. We’re really mad there’s bribery here. Oh, but by the way, there’s nowhere else we’re going to go so I hope we really do well on this agreement.’ I just think that’s a very false premise… We need to be looking at municipalization.”
Becky Vevea covers city politics for WBEZ. Follow her @beckyvevea.