(The Center Square) – When news broke in July that electrical utility ComEd had struck a plea deal with federal investigators in exchange for a $200 million fine and admission that it participated in a years-long patronage scheme to curry favor with Illinois House Speaker Michael Madigan, some were quick to blame corruption under the dome.
However, an energy infrastructure expert contends Illinois’ regulations, not its lawmakers, are a significant factor.
In the months before the utility’s admission, executives for Exelon, ComEd’s parent company, had been warning of potential nuclear power plant shutdowns unless state lawmakers acted to give the nukes a state-based wholesale power market in which to sell their wattage, presumably at a higher profit.
This comes after a series of Legislature-based changes that cleared the way for higher rates on consumers while Exelon updated its facilities with the help of emissions credits for classifying nuclear energy as a zero-carbon energy source.
“Their success or failure depends on the government,” said Josiah Neeley, a senior fellow at the nonprofit R-Street Institute. “Over time, a very cozy relationship developed between the two sides and that has continued today in places like Illinois.”
The Future Energy Jobs Act of 2016 came after public campaigns that resulted in lawmakers, deeply-entrenched in a budget standoff, breaking a partisan split to endorse the measure.
Illinois isn’t alone in the arrangement between lawmakers and utilities.
Public officials in Indiana, California, Mississippi, Florida, Louisiana, South Carolina, Virginia, and most recently Ohio, have created controversy over their dealings with the public utilities they’re charged with regulating.
“The temptation is always there for politicians to put their thumb on the scale of favored companies opposed to others and when you have a close relationship like that, they almost become a favored company by definition,” Neeley said.
ComEd would employ dozens of lobbyists every year to advocate on the utility’s behalf.
A glaring issue in many cases, Neeley said, is the need to separate the power generation aspect of a company and the more government-reliant utility.
“You can have a single company that is involved in both sides and they can use one side to benefit the other,” he said.
R Street also suggests more transparency for the regulated utilities.