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  1. #1
    Senior Member crazybird's Avatar
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    A near bankrupt electric co?

    Power outrage: Quinn slams electric rate hike
    ComEd 'should tighten their own belt,' Quinn says

    October 16, 2006
    BY MAUREEN O'DONNELL AND LORI RACKL Staff Reporters
    Robust profits.

    And a top exec who pulled down more than $27 million last year.

    » Click to enlarge image

    Lt. Gov. Pat Quinn, inset, is urging people to fight the electricity hike, citing salaries of those such as Exelon CEO John W. Rowe.
    (AP/Sun-Times illustration)

    RELATED STORIES
    • Electric bills to rise 22%
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    Hiking up your bill
    Reasons for the rate hike
    The utility, which hasn't been allowed to raise rates in nearly a decade, said continuing the rate freeze could lead to bankruptcy because ComEd would have to buy electricity at a higher price than it could charge customers, causing it to lose an estimated $1.4 billion. Other repercussions include the possibility of rolling brownouts, slower repairs, layoffs and a downturn in the state's economy. Some say the rate freeze also staves off competition from entering the market, which could eventually lead to lower prices.


    Reasons against rate hike
    Consumer advocates and some lawmakers argue that ComEd and its parent company, Exelon, are in robust financial shape and that bankruptcy talk is unfounded. Exelon stock is near a record high, the combined total compensation for a handful of the utility's top executives is nearly $47 million a year, and profits have more than tripled during the nine-year rate freeze. They say jacking up next year's rates anywhere from 22 percent to 26 percent -- and much more for bigger businesses -- would be gouging consumers.
    Hardly signs of a company on the brink of bankruptcy, according to a growing chorus opposed to ComEd's impending rate hike for its 3.7 million customers.

    Lt. Gov. Pat Quinn is urging people to fight the hike, blaming it on "inflated egos with inflated salaries."

    "It's hard to get a violin out for anyone who makes $27 million," he said Sunday, deriding the compensation package of John W. Rowe, CEO of Exelon, ComEd's parent company.

    ComEd hasn't been allowed to raise electricity rates for nearly a decade. Utility officials say they'll lose about $1.4 billion -- and be headed for bankruptcy court -- if rates don't go up. A recent state power auction, in which power providers bid to supply electricity to ComEd, resulted in the rate hike that will boost the average ComEd customer's bill an estimated 22 percent to 26 percent after Jan. 1.

    Gov also objects
    The consumer advocate group Citizens Utility Board, or CUB, doesn't buy ComEd's doom-and-gloom scenario.
    "When their executives are making as much money as they're making, and when they're spending at least $15 million on television ads trying to convince us they need a rate hike -- it doesn't pass the straight-face test,'' said David Kolata, chief of the watchdog group.

    A CUB study says ComEd/Exelon earned $2.1 billion last year, and its profits more than tripled during the nine-year rate freeze. The analysis dubbed Exelon the most profitable electric utility in the country, with Exelon's shareholders getting a 21 percent return on their invested equity -- double the national average. The study also projected that the company would post "extremely high profit levels" through 2012 even if rates were reduced by 5 percent.

    "They should tighten their own belt," Quinn said.

    In a separate appearance from Quinn, Gov. Blagojevich assailed the rate hike -- which ComEd says would boost the average $60 residential bill to $73. Calling the auction process "a back-door way of trying to get a rate increase," Blagojevich said he would call a special session of the Legislature to extend the freeze "just as soon as we have the votes in both chambers and can get legislators to call the bills."

    Getting those votes might not be easy. ComEd/Exelon and its employees have pumped more than $958,000 into state and local candidates' coffers over the last three years.

    If the governor calls a special session, he should schedule it before the Nov. 7 election to pressure lawmakers into action, state Treasurer Judy Baar Topinka said through a spokesman. Topinka, the Republican nominee for governor, wants the rate freeze to remain in place "so we can go back to the drawing board and come up with a more equitable system for evaluating rates," said spokesman John McGovern.

    Making his point by standing before a stretch limo near Exelon Plaza in the Loop, Quinn attacked Rowe's $27.5 million compensation package.

    "Nobody's worth that much, I'm sorry," said Pat Lydon, 61, a legal secretary from Old Irving Park who was visiting downtown Sunday.

    Quinn wants the Illinois Commerce Commission, which oversees utilities, to probe compensation for Rowe and four other ComEd/Exelon top execs who received packages of $2.7 million to $7 million last year.

    Quinn's complaints about executive salaries are "misleading," said Exelon spokesman Thomas Stevens.

    "Exelon senior executive salaries are paid by Exelon shareholders, not ComEd customers,'' the company said in a statement. Further, ComEd executive salaries are set by the ComEd board of directors, "to attract and retain industry leaders so that the company can continue to deliver to customers the reliable service they expect.''

    Was in sarcophagus dispute
    Under Rowe's leadership, Forbes magazine ranked Exelon as the No. 1 utility company on its 2005 list of the best-managed companies in the United States.
    Rowe, 61, has led electric utilities since 1984. The lawyer and University of Wisconsin grad lives in a high-rise on North Michigan Avenue. Rowe could not be reached Sunday for comment.

    While Rowe's salary is making headlines, it was one of his prized possessions -- a 2,600-year-old Egyptian coffin -- that catapulted his name into the news earlier this year. After an Egyptian official took issue with Rowe having the sarcophagus in his office, Rowe agreed to put the ancient coffin on indefinite loan to the Field Museum.

    Contributing: Art Golab, Steve Patterson


    http://www.suntimes.com/news/metro/9840 ... 16.article
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    Power crunch spotlights deregulation turmoil

    Another impact of millions of illegals flooding into our Country depleting our resources? YEP! AND lets not forget the GREEDY CEO's!!!!!!!



    http://www.msnbc.msn.com/id/15292581/


    Power crunch spotlights deregulation turmoil
    Report says electric grid is stretched to the breaking point
    By John W. Schoen
    Senior Producer
    MSNBC

    Updated: 4:20 p.m. CT Oct 16, 2006
    A report that the nation faces more frequent power outages comes just as a decades-long debate over industry deregulation heats up — and shows no signs of resolution.
    With roughly half the states stuck midway in a long-term experiment in rate deregulation, consumers in many of those states now face big rate increases next year as rate caps expire. And with billions of dollars of additional investment needed to keep the power grid humming, it’s not at all clear where that money is going to come from.
    Until new power plants and transmission lines can be deployed, the reliability of the nation’s power grid will likely get worse before it gets better, according to the North American Electric Reliability Council, which oversees North America's power grid. In a report issued Monday, the group said that a looming power supply crunch will likely worsen over the next decade as power demand outstrips new capacity.
    The impact will be felt unevenly but will be widespread, the report said. In the next two to three years, surplus capacity needed to keep the lights on in Texas, New England, the mid-Atlantic, the Midwest and the Rocky Mountain regions will drop to levels that make brownouts and blackouts more likely.
    And with power demand seen rising 19 percent by 2015, and generation capacity expected to rise just 6 percent, "the adequacy of North America's electricity system will decline unless changes are made soon," the council's president, Rick Sergel said in the report.
    In addition to building more power plants, companies need to upgrade transmission systems, improve energy efficiency programs for businesses and consumers and prepare to replace an aging work force, the council said.
    It wasn’t supposed to work this way. Under the old, state-regulated business model, electric utilities controlled both the plants that generated power and the lines used to move it to customers. When more capacity was needed, state regulators oversaw those utilities' expansion plans and decided how much of the cost could be passed along to power customers.
    Buoyed by the '80s-era deregulation success stories of the natural gas, telecom, airline and trucking industries, the electric power industry, with the help of Congress, embarked on a similar path. The hope was that by breaking up the ownership of power generation and transmission, competition would spur new, investor-funded capacity, drive the development and deployment of new technology and — over the long run — drive down prices for consumers.
    But it hasn't worked out that way. After decades of change that included the near-collapse of California's power industry and the power trading scandal at Enron, the industry is stuck halfway between a market-driven future and a state-regulated past.
    “We have one foot planted firmly in traditional regulation, one foot planted in competition,” said Ken Malloy, founder of the Center for the Advancement of Energy Markets. “And (we have) very little enthusiasm for going further from regulation to the competition side and very little from the competitive side to back to regulation.”
    Much of the savings to date has come from state-mandated caps and rate freezes that will soon expire — leaving power customers facing potential big increases in their monthly bills. If those caps are extended, utilities say they face big losses because competition hasn’t yet driven down the market price of the power they need to buy on behalf of their customers.
    Case in point: Last week top executives of the two big Illinois utilities told a committee of the state legislature that their companies will go bankrupt if lawmakers extend a cap on electric rates.
    With elections just weeks away, Exelon’s Commonwealth Edison and Ameren Illinois are fighting a move by Illinois lawmakers to block a rate increase set to kick in when a 10-year-old law deregulating rates expires at year's end. ComEd Chairman Frank Clark said the state’s rate freeze would make life worse — not better — for consumers.
    "They'll pay more all around and have less-reliable service," Clark said.
    The move toward market pricing — which was supposed to lower rates over the long term —would mean rate increases over the short term, according to the companies. Starting in January, Illinois consumers face an average increase of between 22 and 55 percent compared with what they’ve been paying for the past decade. But ComEd has said it expects lose $1.4 billion if those increases are blocked. The company also faces cuts in its debt ratings if the freeze is extended.
    And Clark said “partial deregulation” was a big part of the current problem. Not enough new power generation players have entered the state to drive down prices — and rate caps are one of the reasons why.
    "Competition has not developed, and the reason it has not developed is that rates are so artificially low no competitors can come in here and beat them," he said.
    But Illinois Lt. Gov. Pat Quinn, who said the utility’s executives got pay packages of $2.7 million to $7 million last year, blamed the rate increases on "inflated egos with inflated salaries."
    The same scenario is playing out in many of the two dozen other states that have moved toward deregulation. Even where deregulation is beginning to take hold, looming rate increases are creating a backlash.
    “Even the states that have moved (to deregulate) are being pummeled with lots of concerns about where this is all going,” said Malloy.
    All of which has discouraged the kind of heavy, long-term investment needed to add more power generation and upgrade the reliability of the national grid. Power generators now face rising natural gas costs; ironically, one reason for the jump in gas prices is the surge in popularity of the fuel after 1980s-era natural gas deregulation spurred a construction boom of gas-fired power plants. Now, as the industry relies more heavily on natural gas, supplies of that fuel are stained and prices are rising.
    That has power companies looking for alternative sources, but the options aren’t cheap. Wind and solar are gaining on fossil fuels, but the amount of power generated by these sources is tiny. They are also only available in limited parts of the country — and then only when the sun is shining or the wind is blowing.
    Coal-fired plants are still in widespread used, but eliminating carbon emissions adds to the cost of new plants. And nuclear power, though increasingly attractive to the U.S. utility industry, still faces significant hurdles. Even under the most optimistic timetables, new nuclear capacity won’t be available 2015 at the earliest.
    “There’s a finite amount of fossil fuel, and the environmental regulations are getting more and more restrictive,” said Dan Keuter, head of nuclear business development for Entergy, one of the largest operators of nuclear power generators. “But there’s huge demand for energy.”
    Resistance to tyrants is obedience to God

  3. #3
    Senior Member crazybird's Avatar
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    Absolutly.......unfortunatly the companies have been pocketing the profits instead of re-investing it back into meeting the growth. I'm sure there's some re-investment but not close to the demand. We have areas around me that have the electricity go out for no explainable reason 3 times a month for days. One lady wrote in wondering who she should bill for all the food she's lost. Now they are threatning that there WILL be outages if they don't get their pay increase. Yet no guarentee there won't be if they do. Sounds like blackmail to me. I think it's time they start forgoing their bonuses and start doing their job instead of gouging the people. Is this the way they plan on getting us used to 3rd world ways?
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  4. #4
    UB
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    Treehuggers blocking utilities expansion, especially into nuclear energy, and 100 million more people by 2043 aren't going to help our energy situation.

    UB
    If you ain't mad, you ain't payin' attention = Terry Anderson.

  5. #5
    Senior Member AmericanElizabeth's Avatar
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    Tree huggers indeed!! However, the more dependable kind of energy comes from hydroelectric and wind power. Nuclear power is dangerous and then we have to find a way to deal with the waste that comes from it.

    America has plenty of rivers to put dams on and plenty of windy spots to generate power with.

    As well it would be great if our government would give incentives to homeowners to install solar panels for their water and heating needs at least. Even here in the rainy cloudy Northwest solar energy works great.

    I am no tree hugger by far, I just abhor the thought of using nuclear and having the reprocussions of its use down the road, it is poison to us and future generations.

    We voted here to close our only nuclear power plant, and our rates only rose slightly. It had so many problems and the maintenance of it was higher than the change was to hydro only.
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  6. #6
    Senior Member magyart's Avatar
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    Treehuggers aren't too blame.

    Quote Originally Posted by UB
    Treehuggers blocking utilities expansion, especially into nuclear energy, and 100 million more people by 2043 aren't going to help our energy situation.UB
    It's more than "tree huggers" that refuse to let utilities expand to nuclear energy.

    The electric company's own tree huggers have caused more damage than traditional tree huggers. Lack of maintenance or tree trimming, which reduces costs, have resulted in excessive power outages after bad winter storms. The tree limbs load up with ice & snow, break off, and knock down power lines. More tree trimming would prevent this.

    The costs savings most likely contributed to some CEO's bonus.

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