Exelon and ComEd have introduced a proposal (Senate Amendments 2 and 3 to SB 1585) to drastically raise commercial and residential electricity rates and add new charges that will total $7.7 billion over ten years. While Exelon and ComEd have claimed the rate increases and new charges are necessary to bailout its financially stressed nuclear plants and develop and enhance its “grid reliability,” it’s important that you understand the facts and adverse effects these changes would have on the commercial real estate industry and our tenants.
Below are six key reasons BOMA/Chicago has serious concerns regarding this new energy proposal by ComEd/Exelon:
- BOMA/Chicago buildings make up approximately 5% of ComEd’s energy load, and can expect to be billed an estimated $385 million of the projected increase over the ten-year span. This increase will be passed through to businesses across the city, adding to the ever-increasing cost of doing business here.
- Exelon made more than $2 billion in profits last year. Despite massive revenues and increased shareholder profits, the company has repeatedly threatened to shut down its Quad Cities and Clinton nuclear power plants if their bailout proposal doesn’t pass.
- Despite claiming poor-performing nuclear plants, recent power auctions garnered Exelon an extra $1.7 billion for its nuclear plants. Though Exelon claims their nuclear assets aren’t economically viable, they were a big winner in last year’s annual capacity auction, where power producers bid for long-term contracts to supply electricity.
- Exelon’s total rate hike proposal is estimated to be $7.7 billion over the next 10 years. The tax hike burden will fall on government, businesses and consumers.
- It’s estimated that ComEd and Exelon will secure $1 billion in profits over the next 10 years from the proposal. That doesn’t include the $2.6 billion subsidy Exelon’s struggling power plants would receive over that same time period.
- Customers have already paid twice for those nuclear plants. Not only did customers pay for construction of the same nuclear plants through regulated rates, we also paid over $10 billion in customer transition charges to the profitable publicly traded Exelon.
At this time, BOMA/Chicago is not convinced that all income from Exelon’s Quad Cities and Clinton plants has been included in determining whether those plants are profitable. On the cost side, ComEd and Exelon have only provided BOMA/Chicago with preliminary data to estimate the financial impacts to commercial customers.
BOMA/Chicago has begun a constructive dialogue directly with ComEd and Exelon regarding their proposed changes to energy policy in Illinois. As always, it is the goal of BOMA/Chicago to mitigate any potential threat to our members and ensure that any impacts are as minimal as possible.