Dunce Cap

The Illinois legislature continues to consider extending a rate freeze on ComEd, supposedly to protect consumers. In reality, more deregulation not less leads to reliable power at lower prices. This cap would have disastrous consequences for power and the state economy. Tribune:

ComEd would almost certainly file for bankruptcy to protect its assets. It would curtail spending on preventive maintenance and storm damage repairs--either on its own or by order of a bankruptcy judge. Ultimately, ComEd and its customers would end up paying more for power when its first auction contract expired and it went back to market a year from February. That is, if companies were willing to take a chance on contracting with ComEd.

This isn't a bluff. Michael Peevey, president of the California Public Utilities Commission, said he shudders to think that Illinois is on the verge of making the mistake--freezing rates that guaranteed a gap between the cost of power and the price utilities can charge--that California did. California's mistake led to a monumental, cascading screw-up that drove its utilities into bankruptcy. In Illinois, this would be accomplished by a single willful act of the legislature.

So when storms hit and your power isn't quickly restored, look to the Illinois legislature---they can only offer you their Dunce Cap for some cold comfort.