Subject: ComEd Transmission Rate Increase
From: [email-masked]
To: [email-masked], [email-masked], [email-masked], [email-masked], [email-masked], [email-masked], [email-masked], [email-masked], [email-masked], [email-masked], [email-masked]
Cc: [email-masked], [email-masked]
Date: Fri, 12 Oct 2001 11:59:48 -0700 (PDT)

ComEd has filed at FERC for an increase in transmission rates underwhich their revenue requirement would double to approximately $340 million, an 83.15% increase in the monthly rate.  Ancilliary charges will increase by 26%.  According to Ex. CEC-300, the charges would be as follows:

	*Annual charge ($/kw/yr) -   20.86
	*Monthly charge ($/kw/mo) - 1.74
	*Weekly charge ($/kw/wk) -  0.40
	*Daily charge ($/kw/day) -    0.080 capped at Weekly Charge
	*Hourly charge ($/kw/hr) -    5.01 capped at Daily and Weekly Charge

The issue is the effect on any transmission rate increase on our existing book of business and on our ability to competitively price power to new customers.  Unfortunately, given the weaknesses in the statute, the transmission rate increase impact will depend on how the ICC rules on our Motion to Dismiss in the ComEd rate case.  In that case, we have argued that increases to distribution are unlawful because they are not expressly permitted by statute.  If we get a favorable ruling, which should be issued perhaps next week, we will be in a better position to assess our ability to argue for an equitable outcome on transmission.  

Interestingly, on October 2, 2002, the ICC filed Comments in the ComEd case (Docket ER01-2992-000) at FERC in which they urge FERC to reject ComEd's levelized ratemaking proposal; initiate a hearing and investigation; and, suspend the rates pending investigation.  The ICC states that it is concerned that levelized rates "...would negatively impact retail competition in Illinois due to the fact that the transmission component of bundled retail rates in Illinois was determinined on a net plant basis.  With bundled retail rates effectively frozen in Illinois though the end of 2004,  any increase in the unbundled transmission rate will serve as a disincentive for retail customers to switch to unbundled service."  ICC concludes that this would take the competitive pressure off of Com Ed and goes on to mention that intervenors have raised similar issues in the DST case before the ICC. 

Once we have a ruling on the distribution rate increase, I will let you know.  From a procedural standpoint, we have intervened in this case at FERC and are expecting and Order in the next month setting forth the procedural schedule, so there is time to decide what we want to do and develop a strategy.

Janine