http://newsblogs.chicagotribune.com/news_opinion_letters/ComEd hike laughable
The Tribune's assertions that ComEd will be able to compete and charge "market price" to its customers is laughable in the face of economic facts ("Reality check on electric rates," Editorial, Oct. 11).
When ComEd needed the money to build their nuclear power plants at a considerably high cost, they were a monopoly with a captive customer base, and that base was forced to pay for those plants. Illinois customers gave ComEd tax breaks and paid significantly higher than average electricity rates for years to cover the costs of these nukes.
Just when ComEd's customers were about to see an end to their investment paying off the nukes' mortgages, ComEd diversified, created a parent company, Exelon Corporation, sold its coal stations, paid off the mortgages on its nukes, separated distribution – ComEd from generation – Exelon Energy, and now tells us the distribution costs are too high, so they must raise rates. The generation side already makes enormous profit since the going "market price" for electricity, mostly coal produced, is far above what it costs Exelon's nuclear fleet to generate. The distribution side, ComEd, makes little profit. Typically, as Exelon/ComEd knows, distribution profits are almost entirely eaten up by maintenance and repair of existing delivery systems as well as new installation. Taken as a whole though, Exelon Corp's profits are great and will continue to be so even with years of a continued rate freeze.
So what else can Exelon do but, with the help of the deregulation law they lobbied so hard for, abandon the customers who paid for those plants and auction off that much anticipated cheap electricity to the highest bidder? Also, ComEd will now have to bid for the electricity that we are forced, due to an non-competitive market, to buy from them. Neither scheme will save Illinois consumers any money and will definitely create an even larger profit margin for Exelon/ComEd.
Now if ComEd is so worried about the cost of purchasing the electricity they provide us and the solvency of their company, then why did they ever leave the free electricity they were getting from...themselves? I'll tell you why, they wanted to make the distribution side as obscenely profitable as the generation side with both subsidiaries dumping their windfall profits into the pockets of their parent company's executives' pockets.
ComEd's supposed demise and its subsequent pleas for financial relief are being passed off as an uncontrollable consequence of an unregulated and competitive utility market. What it really is is the entirely foreseen, calculated and highly anticipated culmination of a shrewd and cruel business plan that takes advantage of a competition-free market and is designed to strong arm rate increases. This is necessitated by artificially inflated, self-created and predictably higher auction prices theoretically being paid to Exelon, itself, simply to make an inherently low profit division as well as making the already highly profitable parent company more profitable.
Paul Winkelmann
Romeoville
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