Commonwealth Edison (ComEd) has announced it is delaying key elements of its grid modernization program following the Illinois Commerce Commission (ICC) decision that denied cost recovery on two key issues, which ComEd will appeal in court.

ComEd president and chief executive officer Anne Pramaggiore says, “With this ruling, we have no choice but to delay some elements of the grid modernization rollout, at least until we have an outcome in the courts. The adverse rulings on the interest rate and rate base issues significantly impair ComEd’s ability to finance long-term investment programs.”

In 2011, the Illinois General Assembly passed the Energy Infrastructure Modernization Act (EIMA), directing electric utilities to invest in the state’s electric infrastructure, improve reliability, create jobs, and attract investment to Illinois. The law also gave utilities the right to recover the actual costs of investment, meaning—as far as ComEd is concerned—the ICC ruling is inconsistent with the legislation on two of three issues considered on rehearing.

After the ICC denied ComEd cost recovery on 13 issues in May, the company sought rehearing on all 13 issues but the ICC agreed to reconsider three, and reversed its earlier decision on only one. The utility reports the impact of the ruling will be nearly $100 million per year in 2014 and beyond, costs that cannot be recovered and subsequently reinvested into the system.

Pramaggiore adds: “Although today’s ruling will allow us to maintain a minimal level of investment of a few core programs, it is insufficient to fully fund our grid modernization efforts. While we remain committed to fulfilling the promise of EIMA and intend to meet our obligations under the law, we have to be judicious about making investments if we do not have full cost-recovery, as authorized by the legislation.”

Because the ICC is not fully funding the grid modernization program, ComEd states it was forced to modify its program so the utility is delaying the installation of additional smart meters until 2015. In addition, some of the basic infrastructure programs as well as the Chicago training center will either be delayed or phased in more gradually. The result is that more than $2.3 billion in customer savings and creation of 2,000 full-time equivalent jobs will be delayed.

The delays will potentially impact the job market, says Dean Apple, president of the IBEW Local 15. “Labor leaders enthusiastically supported EIMA, also known as the smart grid bill, and it has already resulted in many well-paying, skilled jobs for Illinois union workers while providing a boost to other local industries. This decision will have a negative impact on the union workers and others hired to do this important work, their families and our state as a whole. We hope this decision will be reversed in the courts.”

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