Chicago Seeks Competitors For ComEd’s Utility Franchise Deal With The City

Chicago is seeking a competitor for Commonwealth Edison's franchise agreement with the city. Manuel Martinez / WBEZ
Chicago is seeking a competitor for Commonwealth Edison's franchise agreement with the city. Manuel Martinez / WBEZ

Chicago Seeks Competitors For ComEd’s Utility Franchise Deal With The City

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Chicago is seeking competitors to potentially replace embattled Commonwealth Edison as the city’s long standing electricity provider — or will use that leverage to broker a better deal with the utility giant.

Officials have issued a so-called “Request for Information” from public utility companies interested in operating and distributing the city’s electricity. It’s the first time the city has opened up its options for electricity delivery in more than 30 years. ComEd’s agreement with the city expired in December.

The move comes as ComEd has dealt with fallout from its involvement in a years-long bribery scheme and after months of pressure from Illinois Gov. JB Pritzker and Mayor Lori Lightfoot to change the way it charges customers.

In September, Lightfoot demanded ComEd stop using so-called formula rates — which essentially guarantee the company increased rates each year — if it wants to sign a new deal with the city. The mayor was also pushing the company to sign a formal “Energy and Equity Agreement” as part of a new franchise agreement.

“I’ve made it clear to ComEd what I expect in a new franchise — more accountability to Chicagoans, a continued focus on reliable electricity delivery, fast and transformative progress on our citywide climate goals and an equitable way to lower costs for residents,” Mayor Lori Lightfoot said in a press release.

“Whether it is continuing to disconnect residents during the COVID-19 pandemic or recent rate increases, it is clearer than ever that we need an electricity franchise that delivers better results for our residents.”

In a statement, ComEd spokeswoman Shannon Breymaier said the company’s discussions with the city have been productive, noting “recent agreements to expand energy efficiency and more than double the assistance to low income customers.”

“Chicago residents’ electric bills are lower than they were nearly a decade ago, and customer satisfaction is the highest in history, primarily driven by improved reliability and our reasonable rates,” Breymaier said. “No matter who runs the grid, the first priority is reliability because as all Chicagoans know the climate crisis is creating unprecedented weather events that in the last year alone have resulted in catastrophic grid failures in Texas and California, an experience that lies in sharp contrast to how our grid performed in August after the derecho.”

Lightfoot has also been pushing ComEd to create community solar sites in Chicago, support for CTA bus electrification, end late fees and provide relief to low-income customers.

ComEd enjoys a near-monopoly in Chicago and far beyond, delivering power to roughly 70% of the people of Illinois. The formula rates it uses have been hugely profitable for the company since they were passed in 2011. State law allows the company to bypass state utility regulators when implementing rate hikes to cover losses, and essentially guaranteed ComEd would always turn a profit.

Officials were careful to note the “request for information” does not mean the city will not enter into another agreement with ComEd. Instead, it allows the city to evaluate options and potentially negotiate a better agreement with the utility.

The move falls short of previous demands from activists that the city run its own utility services to give Chicagoans more control over rates and move the city toward renewable energy more quickly.

A study pegged the cost of running its own utility at $8.8 billion and recommended against the city embarking on the lengthy and costly process.

The city said it plans to move forward with the franchising process later this year. The “request for information” can be viewed here. The deadline for responses is May 28.

WBEZ’s Becky Vevea contributed.

Mariah Woelfel covers city government for WBEZ. You can follow her @MariahWoelfel.