ABB wins ComEd substation order; rate rise challenged

Switzerland’s ABB Group reported it won a $44 million turnkey order from Chicago’s Commonwealth Edison Co. to build a new electric service substation to meet growing demand for power in the city.

Following power outages in the summer of 1999 that outraged city leaders, ComEd, a unit of Exelon Corp., Chicago, agreed to invest in major upgrades to its distribution facilities. Richard Siudek, executive vice-president and head of ABB’s utilities division, said the company worked with ComEd to define a 5-year plan to make changes to the Chicago grid that will boost reliability and competitive service delivery.

ABB engineers used advanced grid modeling and simulation techniques to help ComEd design a network capable of rerouting power around any disturbances that might occur in the grid. This included the fast-track provision of one new substation and major expansions at four others.

The new substation is scheduled for completion and start-up in May 2002.

ComEd has also filed a plan with the Illinois Commerce Commission seeking a $575 million, 47.5% rate increase to help pay for operating and maintaining the distribution system. Consumer groups protested the plan, claiming ComEd pledged to pay for the upgrades.

Although rates wouldn’t rise immediately, because of a freeze until 2005, the Citizens Utility Board said the plan means all ComEd customers will pay higher rates in the future. The organization said residential customers would bear the heaviest burden.

In testimony filed with the Illinois regulators, experts hired by CUB, the Office of the Illinois Attorney General, and the City of Chicago, called on regulators to conduct an audit of ComEd’s investments in the distribution system before any increase is approved.

CUB Executive Director Martin Cohen said the proposed rate increase represents a “broken promise” by the utility.” The company said it would not pass the cost of fixing its system on to consumers, but that is exactly what it plans to do,” he said.

Illinois is in the process of opening its electric industry to competition and once the market is fully opened, all consumers will be allowed to switch to a new company to supply power. But those companies will use ComEd’s transmission and distribution system to deliver power to their customers.

Under the 1997 law that opened up the electric system to competition, all commercial and industrial customers were allowed to shop around for new power suppliers by Jan. 1, 2001. Residential customers will be allowed to switch suppliers in May 2002.

The law also mandated a rate cut for ComEd customers and, after that, rates will remain frozen until 2005. Rates dropped 15%, Aug. 1, 1998 and another 6% cut will take effect in October.

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