When Mayor Lori Lightfoot holds a hearing on the city’s franchise agreement with ComEd later this year, at least one alderman, Daniel La Spata (1st), will vie for her to cancel the contract altogether.
His alternative? City Hall takes over the grid itself, transforming Chicago into a public power community like Los Angeles, Austin, Cleveland, and a number of other cities.
Chicago’s deal with ComEd expires on December 31, 2020. The renegotiation comes amid a federal investigation into the power company’s lobbying activities, which involve hiring and paying significant stipends to former legislators and staffers to House Speaker Michael Madigan.
To La Spata, one of five democratic socialists elected to the Council this year, ComEd’s alleged corruption is a result of the company’s profit motive. The utility’s rates have risen 37 percent over the last six years, and ComEd’s CEO, Joseph Dominguez, earned $2.2 million last year — ten times as much as a civic bureaucrat would be paid to oversee the power grid.
“We can have quality, reliable power — we can invest in the grid of the future, in renewables, all this — without the corruption that comes from putting Chicagoans’ dollars into lobbyists,” La Spata said.
ComEd has been Chicago’s dominant electricity supplier since 1907, when it consolidated under one company. It became the city’s sole supplier in 1947. This will be the third time the city has renegotiated the franchise agreement, which has required ComEd to pay the city $74 million a year since 1992.
If the city takes over the grid, says La Spata, it can implement a progressive rate structure, in which low-income or low-volume consumers are charged less per kWh. The city could also accelerate the grid’s use of renewable energy sources, such as solar and wind power, without “having to rely on what we’re really learning is a very corrupt leadership and organization.”
The American Public Power Association estimates that 49 million Americans live in public power communities. Their rates are, on average, 13 percent lower than those of private power customers.
City Council’s democratic socialists are way out ahead of the establishment on public power. In July, La Spata was one of 22 aldermen who sponsored legislation asking for a feasibility study on public power. 12th Ward Ald. George Cardenas, chairman of the City Council’s Environmental Protection and Energy Committee, agreed to the study, which will be completed early this year.
Cardenas himself doesn’t believe a transition from ComEd to public power is feasible. The city, for instance, doesn’t have the $5 billion it needs to purchase ComEd’s equipment, nor the expertise to operate it. Running the power grid would require hiring a corps of unionized employees and adding them to the already-broke pension system.
“Right now, it’s pie-in-the sky,” Cardenas said. “It doesn’t seem very practical.”
La Spata acknowledges that the city would have to issue a bond to buy ComEd’s assets. However, he argues that proceeds from energy rates would not only pay for the bond but create a revenue surplus.
40th Ward Ald. Andre Vasquez believes the city is better off owning as many public services as possible. Chicago already runs its own water system and created the Chicago Transit Authority by buying up private rail lines.
“The city has made mistakes in selling off public assets, like the parking meters, so we need to have this conversation,” Vasquez said.
In a July debate with La Spata on WTTW’s Chicago Tonight, ComEd spokesperson Melissa Washington also addressed the impracticality of switching from private to public power.
“The cities that have muni-owned electricity systems, they’ve always had them, so it’s not a transition from private to public,” Washington said. “We have yet to find anyone that’s made that transition successfully, and definitely no one of our size.”
The city may not take over ComEd completely, but it’s not going to be as generous as it was when the last deal was struck in 1991, either. The lobbying scandal gives City Council leverage to push for concessions, such as more renewable energy. Lightfoot also wants ComEd to stop shutting off customers’ power for failure to pay, just as the city has stopped cutting off water to delinquent customers.
“We have to make this utility more accountable,” Cardenas said. “They’re not going to get 30 years this time. They’re not going to get 20 years. They may get five or ten years.”
When that agreement expires, democratic socialists may have expanded their numbers on the City Council, from a clique to a full-fledged caucus. That would put them in a stronger position to clamor for taking over the power grid. Public power may not come to Chicago next year, but it’s going to be an issue in local politics from here on out.
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