How the "Free Market" loving Illinois Republicans established an effective power/utility monopoly using a federal grant system for the poor.
Low Income Heating Assistance Program (LIHEAP) is a federal block grant system given to states to administer to its low income populations to help pay for the electricity and gas. The aid is means tested and the payments are made directly to the power and gas utilities in each state enrolled in the program in the name of the people who qualify for it.
However since the times immemorial the Illinois political machine has been very skillful in doling out political patronage and unfortunately the latest racket has been codified in the IL law 220 ILCS 5/16-115E (below) . According to the law on the books sponsored by Sen. Sue Rezin , Assistant Republican Leader and passed by both parties in IL State Assembly, anyone receiving the aid has its account frozen in a 12 month bondage to the utility company that received the money establishing what is in effect a power/utility monopoly. Any new entrant to the market, including new renewable energy companies have to present an "energy savings pricing plan" that is impossible to put together due to unpredictable state of spot electricity market as commodity to be approved by the Illinois Commerce Commission (ICC). The law passed purposefully includes a vague definition of what the energy savings plan is so each entry can be skillfully manipulated and then rejected in favor of the existing monopoly, in this case the Exelon Corp's Commonwealth Edison "ComEd". For example, a three months energy plan introduced by NRG in April 2022 and starting on May 1st , 2022 gives customers power at 7.4 cents per kwh for 90 days with 22500 American Airlines miles as starting bonus ( worth $225) is in the words of ICC "not competitive" vs ComEd own tariff billed at 6.6 cents per kwh (May 1 to May 31st, 2022) and starting June 1st, 2022 at 11.04 cents per kwh. The reason for this rejection was a form letter from the ICC that stating the NRG did not file an "energy savings pricing plan" thus the switch of the energy provider cannot be approved. That puts the ICC and ComEd as ultimate deciders for homeowners whose its energy provider is locked with the ICC there is no appeal process from this decision.
In words of the ICC official that would not agree to give his name to this journalist: " We actually have two markets here in Illinois. Free market for normal customers and monopoly for the low income people." When I asked him why that is the answer was very simple: "many low income residents are not good on keeping records and making sound financial decisions regarding their utility provider so this decision was made for them in shape of this law."
In other words if you are a low income person and received a LIHEAP grant paid to your account at the approved utility you are then on the electric/natural gas plantation tied to the grid, whether you like it or not.
The ComED has been a premiere Illinois power utility since 1907 and it includes nuclear plants. In 2020 the huge corruption scandal involving the top political leadership of the state has brought down its corporate management team with a CEO Anne Primaggiore resigning while the company has worked out a plea deal with the authorities. However the decades long corrupt relationship with the political establishment has survived this temporary set back so the company is now back in business as before and since it is a monopoly it just couldn't do better.
How ComEd Got its Way with Ill. Legislature
How ComEd Got its Way with Ill. Legislature
However what the Illinois political class doesn't understand that while this effective monopoly is hurting residents by sticking them with higher bills while using a federal grant to help them, the overall image of this truly reprehensible situation puts both REPs and DEMs in one basket together. None of them really care about the growing income disparity, inflation and growing discontent of the people who elected them putting the vast majority of population in the class enemy category. This is not a democracy but fascism. .
Exelon Corp did not answer the request for interview
ComEd did not answer the request for interview.
Carrie Zalewski, the chairwoman of the ICC did not answer a request for interview.
John Feeley, the ICC legal counsel stated that he does not offer legal advice and declined a request for interview.
Sue Razin, a Deputy Republican leader and the sponsor of the 220 ILCS 5/16 did not answer a request for interview.
David Welter, Republican Conference Chairperson did not answer request for interview.
Lauren Christopher, Director of Office of Community Services/Division of Energy Assistance, US Dept of Health and Human Services did not answer requests for interview.
(220 ILCS 5/16-115E)
Sec. 16-115E. Alternative retail electric supplier utility assistance recipient.
(a) Beginning January 1, 2020, an alternative retail electric supplier shall not knowingly submit an enrollment to change a customer's electric supplier if the electric utility's records indicate that the customer either received financial assistance in the previous 12 months from the Low Income Home Energy Assistance Program or, at the time of enrollment is participating in the Percentage of Income Payment Plan, unless (1) the customer's change in electric supplier is pursuant to a government aggregation program adopted in accordance with Section 1-92 of the Illinois Power Agency Act, or (2) the customer's change in electric supplier is pursuant to a Commission-approved savings guarantee plan as described in subsection (b).
(b) Beginning January 1, 2020, an alternative retail electric supplier may apply to the Commission to offer a savings guarantee plan to recipients of Low Income Home Energy Assistance Program funding or Percentage of Income Payment Plan funding. The Commission shall initiate a public, docketed proceeding to consider whether or not to approve an alternative retail electric supplier's application to offer a savings guarantee plan. At a minimum, the savings guarantee plan shall charge customers for electric supply at an amount that is less than the amount charged by the electric utility.
(c) An agreement entered into between an alternative retail electric supplier and a customer in violation of this Section is void and unenforceable. Before the electric utility executes a change in a customer's electric supplier, other than a change pursuant to a government aggregation program adopted in accordance with Section 1-92 of the Illinois Power Agency Act or a Commission-approved savings guarantee plan as described in subsection (b), the electric utility shall confirm at the time of the request whether its records indicate that the customer either has received financial assistance from the Low Income Home Energy Assistance Program in the previous 12 months or, at the time of enrollment, is participating in the Percentage of Income Payment Plan; and if so, shall reject such change request. Absent willful or wanton misconduct, no electric utility shall be held liable for any error in acting or failing to act pursuant to this Section.
(Source: P.A. 101-590, eff. 1-1-20.)
Please don't blame the free market for the actions of corporatists.