ComEd files multi-year grid plan, rate plan

Published on January 18, 2023 by Kim Riley


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Illinois regulators on Tuesday received multi-year plans for rates and continued grid investments from Commonwealth Edison Co. (ComEd), the Chicago-based energy company owned by the publicly traded Exelon Corp.

Together, ComEd says the proposals will ramp up its efforts to meet state-mandated clean energy and decarbonization goals as it works to meet higher electricity demands. The company’s proposed rate hike is needed to pay for the grid plan, according to its filing.  

“These proposed investments are necessary to deliver the resilient 24/7 power our customers depend on, prepare the grid for fleets of electric vehicles and electrification, integrate more clean energy and battery storage, and equitably advance a decarbonized energy future,” ComEd CEO Gil Quiniones said on Tuesday. 

The multi-year grid plan and the four-year rate plan are in line with the requirements of the state’s Climate and Equitable Jobs Act (CEJA) and will help ComEd bolster the infrastructure and economy in its Illinois service territory, where it has four million customers. The plans also align with ComEd 2030, the company’s recently announced vision for a carbon-free energy future.

“In addition to supporting the goals of CEJA, the plans will create good-paying local jobs and drive investment to help ensure all communities — especially those that are under-resourced — benefit from the clean energy transition,” said Quiniones in a statement. “ComEd has a critical role in ensuring the transition to cleaner energy is reliable and equitable for all.”

The plans, which were filed Jan. 17 with the Illinois Commerce Commission (ICC), aim to ensure that the electric grid remains reliable and resilient for ComEd’s customers, particularly during severe weather events, the company said.

For example, the ComEd grid plan, which follows input provided during 15 ICC-led workshops, now will be reviewed by the ICC and other public agencies, as well as consumer, environmental, and other groups before the commission issues a decision in December. State regulators also must find all costs “prudent and reasonable” before including them in rates.

ComEd’s rate plan sets base rates and revenue requirements for four years in an effort to provide greater predictability for customers while funding investments that are required to deliver at least 40 percent of benefits to equity investment-eligible communities, according to the filing.

Specifics of plans

In its filing, ComEd requested that the ICC consolidate the rate plan with its grid plan into one docket; approve its multi-year rate plan; approve its Rate MRPP – Multi-Year Rate Plan Pricing tariff; and authorize the public utility to make compliance filings “necessary to timely place into effect tariffs providing for the recovery of these revenue requirements beginning with the first billing period of 2024.”

ComEd’s rate plan would cover billing periods from January 2024 through December 2027. Each year’s revenue requirement includes the capital investments and operating expenses necessary to provide “adequate, efficient, reliable, and safe service,” according to the filing.

The investments and operations funded by these revenues will meet the goals and requirements of the CEJA, the filing says, including a continued emphasis on the reliability, resiliency, and efficiency of the grid — especially in the face of growing threats such as those posed by climate change and various threat actors — the creation of jobs and promotion of economic and workforce development; support for deepened decarbonization; and equitably delivering cleaner and resilient energy to all customers. 

In testimony included in the filing by Quiniones supporting ComEd’s rate plan, he explained that the rate plan provides the financial support necessary to realize the grid plan and meet ComEd’s service obligations, while the plans together “represent the best path to provide the benefits of a clean energy economy for ComEd’s customers and the residents of northern Illinois.” 

Additionally, ComEd’s proposed Rate MRPP, the tariff that will enable recovery of the costs identified in the rate plan, incorporates “an objective reconciliation process” that will true-up the forecasted annual cost of service used to establish rates in this proceeding, to the actual prudent and reasonable costs ComEd incurs in each year. 

ComEd’s key areas of investment include:

  1. Improving service reliability and storm response: Upgrade and replace poor-performing or obsolete cable, wood poles and other equipment; trim or remove trees near power lines; and deploy advanced analytics that help prevent power outages and improve restoration of service to customers.
  2. Supporting the clean energy transition: Enable safe and effective electrification of vehicles, homes and industry through necessary upgrades to power lines and substations to meet increased electric demand and invest in technology needed to integrate large amounts of clean energy securely, safely and efficiently.
  3. Improving coordination with communities: Enhance community resilience to storms and resource management for storm restoration.
  4. Ensuring all communities can access and benefit from clean energy: Expand programs to prepare local residents for good-paying clean energy jobs and use the advanced communication network to close the digital divide in under-resourced communities.

Currently, ComEd’s average total monthly customer bill is $93 and its residential customers’ bills are about 20 percent lower than the average in the 10 largest U.S. metropolitan areas, the utility says. 

Under its proposed rate plan, there would be an increase of roughly $4.25 in the average monthly residential bill annually from 2024 through 2027, for a total impact of $17 by 2027. The plan also includes an increase in annual delivery costs of $1.47 billion spread out over four years, and ComEd is seeking ICC approval to defer 35 percent of the 2024 increase until 2026 to smooth the transition for its customers.

Support rolls in

ComEd also maintains that its highly reliable grid will continue to create savings for customers, noting that since it started smart grid improvements in 2012, it has improved overall reliability by more than 80 percent, helping customers avoid more than 19 million outages and save more than $3.3 billion in outage-related costs. 

“We are encouraged that ComEd’s plans will build greater resilience, improve the capacity to transition to clean energy and adapt to climate change impacts,” said Neil James, executive director of the Metropolitan Mayors Caucus, which supports ComEd’s Multi-Year Grid Plan. 

Phil Jones, executive director of the Alliance for Transportation Electrification, said now is the time for ComEd to spend the necessary time and resources to invest in grid upgrades in order to meet the challenges of enabling transportation electrification infrastructure, promoting zero or low-carbon energy generation, and allowing customers and communities more choices working with the utility. 

“The ComEd grid plan is based on good planning, solid data, and years of experience, but pivots to the future,” Jones said. “The plan should enable the utility and its customers to meet the urgent needs of reducing carbon emissions and air pollution through electric transportation, as well as advance other electrification uses in homes and buildings as we decarbonize.”

ComEd also estimates that solar power on its grid will grow more than five times from almost 500 megawatts (MWs) today to 2,700 MWs by 2030. Sustaining this growth and preparing to serve more electric vehicles (EVs), buildings and industries while maintaining grid safety and reliability will require physical and digital infrastructure upgrades, said ComEd. 

“EV adoption has grown significantly throughout the country, and specifically in Illinois, in recent years, and we expect this trend to accelerate in the near term,” said Matthew Deal, manager of utility policy at ChargePoint, the largest online network of independently owned EV charging stations. “ComEd’s proposed grid plan establishes a strong foundation to support the state’s goal for one million EVs on Illinois roads by 2030.”

The multi-year plans also support jobs and will drive economic development, the utility said, as renewable energy rapidly expands and various sectors decarbonize. 

“Illinois leads the nation in moving to a clean energy economy built by union labor,” said Joe Duffy, executive director of labor coalition Climate Jobs Illinois. “ComEd’s grid plan represents an important first step towards the clean jobs future.”

“As businesses continue to increase their electrification needs, an affordable, reliable, and clean grid has never been more critical,” added Jack Lavin, president and CEO of the Chicagoland Chamber of Commerce. “ComEd’s continued investments in a more sustainable system will keep Illinois competitive by providing a modernized grid that can attract businesses to our state and contribute to their performance.”