) subsidiary Commonwealth Edison Company ("ComEd") has announced to
delay its plan related to installation of few important elements of
its grid modernization program under the Energy Infrastructure
Modernization Act ("EIMA"). The company is taking this step due to
denial of two of its main appeals related to cost recovery by the
Illinois Commerce Commission ("ICC").
Currently, ComEd will delay some of its key elements until the
company will get outcome from the courts. The new project operation
plan will be replicated in the company's today's filing.
Initially, ICC rejected ComEd's 13 issues related to the cost
recovery; subsequently the commission agreed to reconsider only 3
of the issues. Finally, the verdict allowed the company to recover
only pension costs, which will result the increase of average
residential customer bill by approximately 0.7%, starting at the
end of October, 2012.
EIMA was introduced by Illinois General Assembly in the last year.
The purpose of this regulation is to make investment for the
development and modernization of the state's electric
infrastructure, creation of jobs, enhance reliability and attract
investment to the state. This rule also allows the utility
providers the right to recover their actual investments in the
To follow the EIMA, ComEd has started a 10-year investment program
worth $2.6 billion. Per the program, the company will invest $1.3
billion to strengthen the electric system and an additional $1.3
billion will be deployed to adjoin new digital smart grid and
advanced meter technology. In this year, the company has already
invested substantial amount in smart grid technology and several
projects associated with improvement of customer-reliability.
Rolling out of this program will gradually enable ComEd to add
value to its customers in terms of providing electricity service
with less outages and faster restoration. It also offers customers
more information along with minimization of electricity bill, which
is expected to be more than $2.3 billion in customer savings. In
addition, this new project will create 2,000 full-time jobs in the
We know that utility providers invest regularly for improvement of
energy transmission and distribution operations, and installation
of modern technologies to provide uninterrupted services to its
customers. Further, we believe it is difficult for the companies to
follow these efforts with their own fund, therefore they appeal for
the rate hike to recover their prior investments.
ComEd has followed the same path, but the commission rejected the
company's appeal due to differentiation of some conditions. The
impact of rejection of appeals will be approximately $100 million
annually in 2014, which will subsequently weaken ComEd's ability to
finance its future long-term investment programs.
Exelon Corporation currently retains a short-term Zacks #3 Rank
Chicago, Illinois-based Exelon Corporation, a utility services
holding company, engages in the generation, transmission,
distribution and sale of electricity to residential, commercial,
industrial and wholesale customers. The company competes with
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