CHICAGO — Officials sought to strengthen the city’s hand amid negotiations with Commonwealth Edison — or a new company — on the first franchise agreement to provide electricity to the city in nearly 30 years during a committee hearing Thursday.
The city is set to ink a new agreement with a utility company for the first time since 1992 and has ratcheted up pressure on ComEd to meet its terms, including issuing a “Request for Information” in April soliciting preliminary proposals from competitors.
Mayor Lori Lightfoot will also require any franchisee to sign on to a “Energy and Equity” agreement that considers environmental concerns and the burden of energy costs in certain communities.
David Reynolds, the commissioner of the Department of Assets and Information Services, which oversees the city’s contract with the utility company, told the Committee on Environmental Protection and Energy the city has received “a number” of responses to the request for information and expects to receive “solid proposals we’ll have to consider.”
But Reynolds gave few details about the responses from ComEds’ competitors. The city won’t begin to review them until after the July 30 submission deadline. The review could lead to an official solicitation of proposals that would further ramp up the pressure on ComEd to seal a deal. Reynolds said the city expects to have a deal ready for City Council approval by the end of the year.
Negotiations with ComEd have been put on hold until the status of an energy bill in Springfield is resolved, Reynolds said.
Reynolds said the solicitation to competitors was made, in part, to answer the question “Is ComEd the only game in town?
“To see if there is another either energy company, or team that would include an investor in an energy company, that may come in and take over the operation of the system,” he said.
Lightfoot expects ComEd’s shareholders to foot the bill for any concessions the company makes in the energy and equity agreement, he told the committee.
“What we don’t want to do is to have a program that ComEd implements for the city that just gets passed on to the ratepayers. We are looking for them to reach into some of that profit … and invest that profit from the shareholder side into … either energy efficiency or helping to reduce the energy burden of disadvantaged populations,” he said.
Last summer, the company paid a $200 million fine and admitted its officials bribed public officials. The admission was part of an agreement to defer prosecution amid a wide-ranging corruption scandal centered on former House Speaker Michael Madigan that has resulted in the indictments of several of his close associates. Madigan himself has not been charged and denies wrongdoing.
That corruption probe “put a different spin” on the ongoing negotiations between the city and ComEd, Reynolds said, due to Lightfoot’s “concern” on the company’s ethical standards.
David Glockner, the compliance officer at ComEd’s parent company Exelon, said the company has beefed up its ethics policies since then. But despite a “robust” compliance process, he conceded ComEd “didn’t have a level of detail in the guidance and oversight that clearly we needed” when dealing with public officials.
“The process of monitoring our lobbyists and political consultants clearly could have been better,” he said.
Ald. Brendan Reilly (42nd) suggested the city partner with its sister agencies, including the CTA, to “leverage” its buying power and negotiate the best rates.
“We are a gigantic consumer of electricity,” he said. “I just want to remind my colleagues that these opportunities are rare, and we have a lot more leverage here than I think we’re willing to admit.”
Lightfoot’s City Council floor leader, Ald. Michelle Harris (8th), was the only aldermen during the meeting to extensively praise the company, commending its charitable work in communities of color and expressing concern the city may not reach a deal with the company.
“They just recently helped us open the Chatham Workforce Center and the Chatham community, which will help people [in] finding jobs, getting the training and all the necessary help they need to move forward” she said.
She also said they provide help through investments in a senior assistance program.
“These are the kinds of problems I’d hate to see us lose,” she said.
ROSELAND PUMPING STATION
During the hearing, Far South Side Ald. Matthew O’Shea also sought answers on why the city had to shut down the Roseland Pumping Station in his 19th ward twice in May, resulting in a temporary boil-order for residents affected by the outage on May 6.
O’Shea said in his conversations with city officials, they “have put the blame solely on ComEd.”
Terence Donnelly, president and COO of ComEd’s parent company Exelon, gave a full throated defense of the company.
“I have personally reviewed the records for how the ComEd system performed” on the days of the outages, Donnelly said.
“At no time was there any loss of power on any of the four ComEd lines that serve the pumping station. The four transformers serving the pumping station remained energized the entire time during both events and we’ve offered to assist the city … to help investigate the root cause,” he said.
“None of us wants that to happen again,” he said before urging the city to allow ComEd to join any investigation to pour over the possible reasons for the outages.
O’Shea said the Department of Water Management is investigating what led to the outages. O’Shea filed a complaint with the Office of Inspector General, and he said during the meeting the office is investigating the matter.
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