Is ComEd a Good Pig?
Commonwealth Edison has been taking some heat lately from journalists and Chicago government officials. Not all of the criticism is deserved.
Laura Washington of the Chicago Reporter claims that ComEd is behind in the investment schedule it negotiated when the city renewed the utility's franchise four years ago. Spokesmen for the city have threatened to haul ComEd before an arbitration panel to demand more investment.
That criticism amazes those of us in the business and financial sectors of the city. The public record of ComEd's investments shows that $359 million has already been spent in the first four years under the new franchise, and that ComEd is well on the way toward meeting the agreed-to budget of $1 billion by the end of ten years.
This progress has been made despite the fact that consumption of electricity in Chicago has grown much less than was predicted when the franchise was renewed in late 1991. Indeed, consumption for this year is expected to be 4,692 megawatts, a mere 4 megawatts more than consumption in 1991.
With near-zero consumption growth, there is plainly less need to expand the system's capacity. ComEd's current rate of investment means the system is becoming more reliable, which is exactly what the city wanted from the new franchise.
Much has been said about the Wrigleyville blackout last summer, when temperatures in Chicago soared to record levels. The system was stressed more than at any other time in history, yet only one neighborhood was denied power, and then only for a short period. Since last summer, ComEd has completed the Burnham-Taylor transmission line, increasing the capacity of the city's transmission and distribution system by nearly 20 percent.
Compared to ComEd's performance last summer, the city government's own performance is less than salutary. The city was largely responsible for the 1992 flooding of the tunnel system under the Loop, which knocked out electricity and communications to the downtown business district, including the important financial sector.
Thanks largely to ComEd's around-the-clock efforts, flooded electrical equipment was bypassed, enabling the reopening of the Chicago Board of Trade with more than thirty feet of water still swirling in the basement. And within a week, power was restored to virtually the entire area.
It is amazing, in short, that ComEd is receiving so much criticism when it is doing such a good job. It reminds us of the story you may have heard, of a pig with a wooden leg. When a farmer was asked why one of his pigs had a wooden leg, he said the pig had saved his life on several occasions. "When you find a pig that is so good," said the farmer, "it would be a shame to eat him all at once."
Would we be so critical if ComEd weren't so good?
Jim Johnston is a senior policy analyst for The Heartland Institute and chairs the Institute's Reliability Roundtable, a group of Chicago-area experts in finance and energy.