Gov. Rod Blagojevich finally started showing a little
of that “new way” of doing business last week that he has
promised for so many years but so often failed to deliver. Since day one, Blagojevich has been deep in the
pockets of the state’s utility industry. He has supported just about
every major utility initiative of the past three years, including hugely
controversial proposals by phone giant SBC and electric utility
Commonwealth Edison. Mostly out of public view, the governor has appointed
three members of the Illinois Commerce Commission who have been more than
just friendly with utility interests. Commerce Commission chairman Ed Hurley, elevated to
his position by the governor, has always been a reliable vote for the
utility interests. He was also recently excoriated by Illinois Attorney
General Lisa Madigan for possibly violating state ethics laws by allowing a
utility company to pick up the tab for a secret birthday luncheon in
Chicago. Hurley repaid his share, but Madigan wasn’t impressed. Madigan has since launched a full-scale corruption
investigation of the Commerce Commission’s relationship with
utilities, particularly Peoples Energy — the gas company for most of
Chicagoland. Commissioner Erin O’Connell-Diaz has been criticized in
print for accepting favors from Peoples. O’Connell-Diaz was elevated from a Commerce
Commission administrative law judge to commissioner by Blagojevich shortly
after she ruled in favor of Peoples by stopping an investigation into its
relationship with the infamous Enron company. A different ICC judge ruled
last week that Peoples owed customers more than $100 million in refunds for
the alleged shenanigans with Enron. The governor boasts of being a progressive populist,
but his slavish deference to utility monopolies was about to be seriously
undermined by Lisa Madigan’s investigation. The chickens were about to come home to roost with
ComEd as well. The electric utility was mostly deregulated in the late
1990s, but its consumer rates were frozen for 10 years. That rate freeze is
set to expire in 2007, and ComEd wants to use a controversial power-auction
system that it admits could increase rates by 20 percent. When Blagojevich realized what that could mean to his
reelection campaign next year, he demanded that the Commerce Commission
reject ComEd’s auction plan and come up with something else,
threatening to fire every commissioner if they didn’t heel to his
command. ComEd retaliated by cutting off talks for a massive
wind-generation project — a project that the governor holds near and
dear to his heart. The governor upped the ante. Chairman Hurley was forced to resign. Numerous
sources say O’Connell-Diaz has been ordered to quit or be fired, but
as of this writing she has reportedly signaled her intention to fight the
governor’s edict. The third pro-utility commissioner, Lula Ford, has
been given a pass, probably because she is an ally of powerful Senate
President Emil Jones. Chairman Hurley was replaced with Marty Cohen, the
longtime director of the pro-consumer Citizens Utility Board. The price of
ComEd’s stock dropped by more than 4 percent the day Cohen’s
appointment was announced. The governor’s move drew the ire of utilities,
organizations that represent big business, and the Chicago Tribune editorial page
as an unprecedented assault on an “independent” body. The truth is, the ICC hasn’t been independent
for years, particularly since this governor took office. The commission has
been a blatant tool of the industries it’s supposed to regulate.
Hurley was heard by several witnesses one evening loudly threatening to
eliminate the Citizens Utility Board from the face of the earth. His
replacement by CUB’s former director must have been a bitter pill. The bottom line here is that the governor has finally
fought an opponent that mattered. ComEd, SBC, and Peoples are not straw men
created to provide a convenient shadowboxing enemy — the
governor’s usual approach to bolstering his poll numbers. Yes, he may
have overstepped his bounds, but he did so to correct a grievous error he
made almost three years ago when he signed on to the utilities’
agendas.
This article appears in Sep 29 – Oct 5, 2005.
