ComEd sued over profits tied to bribery charge

Source: By Jeffrey Tomich, E&E News reporter • Posted: Sunday, January 10, 2021

An Illinois consumer group is suing Commonwealth Edison Co. to force the Chicago-based utility to pay back any financial gains linked to a scandal that drew a federal bribery charge.

The Citizens Utility Board, a nonprofit that represents the interests of Illinois utility consumers, filed the lawsuit Tuesday in the U.S. District Court in Chicago.

The complaint grew out of an agreement with federal prosecutors last summer in which ComEd admitted to arranging jobs and contracts and making $1.3 million in payments to associates of Illinois House Speaker Michael Madigan (D) in return for helping pass legislation in 2011 and 2016 that provided the utility more than $150 million in benefits (Energywire, July 20, 2020). Under the deferred prosecution agreement, ComEd agreed to pay a $200 million fine to end the federal investigation into its lobbying practices.

The utility was also charged with one count of bribery in the case, to which it has formally pleaded not guilty.

While ComEd faces various lawsuits brought on behalf of shareholders and former executives — including former CEO Anne Pramaggiore, who faces criminal charges — the complaint filed this week is an effort to recover money on behalf of utility customers.

The lawsuit said ComEd customers saw electric rates climb as a result of the Energy Infrastructure Modernization Act (EIMA) enacted in 2011 and subsequent amendments and legislation to renew the ratemaking provision, which established a system of formula ratemaking favorable to the utility company. And the legislation passed only because of illegal activities by ComEd and lobbyists, public officials and consultants with whom the company was working, according to the legal challenge.

“Specifically, in influencing the passage of EIMA, the ComEd Enterprise secured the formula which allows ComEd to annually increase the delivery rates it charges consumers for electricity with reduced regulatory oversight,” the lawsuit said.

ComEd spokesman Paul Elsberg said the conduct admitted to by ComEd doesn’t mean its 3.8 million customers were harmed by the legislation.

“The bipartisan legislation resulted in substantial benefits for ComEd’s customers, including 70% improved reliability since 2012 and billions of dollars in savings for customers, while residential customers’ bills are lower than they were nearly a decade ago,” Elsberg said in an emailed statement. “This in no way excuses the conduct described in the (prosecution agreement), but that is a distinct issue from the effect of the legislation for ComEd’s customers.”

The Citizens Utility Board filed with the court last year to intervene in a proposed class-action lawsuit brought against ComEd in October. Judge Jorge Alonso of the U.S. District Court for the Northern District of Illinois granted the request to intervene and gave the group until Tuesday to file a complaint.

Among the team of attorneys representing the board in the case is former Illinois Gov. Pat Quinn (D), who led a statewide referendum in the 1980s to create the consumer watchdog group. Quinn served as governor from 2009 to 2015.