Bill would give competition another chance
Competition. It works in the free market to the benefit of all. Companies compete with each other to provide goods and services. As a result, prices are kept low and quality must be kept high. Consumers benefit by being able to choose which quality product or service to buy from firms competing for their hard-earned dollars. It was supposed to work that way in the Illinois electric market when lawmakers passed the Illinois Electric Service Customer Choice and Rate Relief Law of 1997.
The fact that it didn't the first time around is no reason to give up on trying to create more competition, more choice and more value for electricity customers.
After weeks of negotiations, the Illinois General Assembly passed a package of rate-relief measures last week that might just do the trick.
The bill, which passed both the House and Senate and is headed to the governor, would provide rebate checks and bill credits to consumers hit by larger bills after a 10-year rate freeze ended Dec. 31. This effectively would phase in the rate increase over four years so people aren't hit so hard in the wallet, and power companies ComEd and Ameren can be assured of sufficient revenue amid the rising costs they must pay to power generators for the electricity they distribute.
This should quell some of the anger from customers and some of the concern from the investor-owned utilities.
An important component of the bill is creation of an entity that might encourage the competition currently lacking in the state's electricity market.
The Illinois Power Agency would be established as an independent body whose purpose is to bargain for the lowest possible prices for ComEd and Ameren consumers. This ends the reverse auction process the companies used last summer to buy wholesale electricity.
The agency, whose director would be appointed by the governor, also would be empowered to do things to increase options in the electric market.
One thing it could do is build its own power plants.
Another would be to sell bonds to provide money so cities and other governmental bodies could build their own power plants and produce electricity more cheaply.
Anyone familiar with municipal electrical utilities, such as those operating in Rock Falls and Rochelle, realizes the potential they offer for fair and stable consumer prices. Yes, there are start-up costs and continuing expenses, but at least it would give a city or county an intriguing option while putting competitive pressure on established electric providers to be more efficient.
If the Illinois Power Agency is well run, it could bring order from the chaos consumers have experienced with their electric bills the past seven months. The governor should sign the bill and give the agency a chance to succeed.
