CLEVELAND, MAY 1, 1991–Mayor Daley stopped here briefly en route to Washington, D.C., for a firsthand look at Cleveland’s longstanding but little-known experiment with competing electric utilities. He acknowledged good-humoredly that Chicago might learn a thing or two from the city that has been described as the “mistake by the lake.” “In the neighborhoods here,” Daley observed during an impromptu street-corner press conference, “residents can choose which electric utility they want to be served by–the city-owned system or the investor-owned system. It seems to keep prices low and service reliable. I guess there’s nothing like competition to keep both companies on their toes.”
Could such a system work in Chicago–or in some Chicago neighborhoods? The mayor wouldn’t say, but he acknowledged this option could become part of the negotiations now being conducted over the renewal of Commonwealth Edison’s electricity franchise.
As in last week’s photo opportunity, when the mayor ceremoniously installed high-efficiency, energy-conserving fluorescent bulbs in his City Hall office–bulbs like those that Southern California Edison has distributed free of charge to its customers–the mayor refused to discuss details of the city’s negotiations with Edison.
“We’ve agreed not to negotiate in public,” he repeated. “The important thing is that the city has many alternatives to the electric status quo. The idea that we have to either leave things as they are or turn the nuclear power plants over to precinct captains is just not true.
“This franchise may be the most important decision I make as mayor. I’m out here to see various alternatives for myself, and let our people know about them. A well-informed citizenry is our strongest negotiating tool. I want the people of Chicago to know that we will overlook nothing that will help us make a better electricity deal for them–even if we have to go to Cleveland.”
This is the kind of news that community activists in the Chicago Electric Options Campaign, the Labor Coalition on Public Utilities, and the Citizens Utility Board would love to be reading six months from now. But as things stand, this dispatch will probably remain in the realm of fiction–partly because of City Hall’s lack of interest, and partly because Commonwealth Edison’s string of summer outages has upset all kinds of conventional wisdom and turned a fairly quiet negotiation into a classic wide-open Chicago political brawl.
Until the big west-side substation fire and power outage this summer, Edison had a standard answer to every consumer complaint. Rates too high? “We’re there when you need us.” Nuclear power plants expensive and maybe unsafe? “We’re there when you need us.” The company just a bit on the arrogant side (as in its slow and secretive neighborhood PCB cleanup)? “We’re there when you need us.” Service charges that hurt poorer consumers? “We’re there when you need us.”
When you have just one answer to every question, it had better be a good one. Now that it’s no longer so good, everyone’s calculations have been upset. Edison’s own public-relations and negotiating stance has become more difficult; their old advertising slogan, “Doing things right,” now has a decidedly humorous ring, and politicians who might have welcomed a sweetheart deal can no longer allow themselves to be seen in Edison’s company.
The Daley administration has also been caught off-guard, though some cynics might call its surprise a pleasant one. Despite the fact (revealed by Tom Brune in the Sun-Times August 24) that no public agency ever inspects Edison’s substations, the city seems to have assumed that the utility’s distribution system was in good shape. Now that it appears not to be, the administration either (a) needs time to investigate the system or (b–the cynical view) now has all the excuse it needs to put the whole troublesome mess off until after next spring’s mayoral elections. In either case, last month Daley requested, and Commonwealth Edison agreed to, a one-year extension of Edison’s franchise in Chicago, which was scheduled to expire this December 31.
The extension proposal, which requires ratification by the City Council, is confusing Edison’s opposition. On September 6, the Chicago Electric Options Campaign–a coalition of 25 community groups ranging from IVI-IPO and the Center for Neighborhood Technology to the South Austin Community Council and the 37th Ward Democratic Organization on the Move–held a meeting cum press-conference to celebrate the extension as a victory and as an opportunity for more and better public involvement in the franchise-renewal process. Coalition members spoke in favor of the extension at the September 27 hearing of the City Council’s Committee on Energy and Environment.
On the other hand, Fifth Ward alderman Larry Bloom thinks a one-year extension is an awful idea. “Either we negotiate now, or after they’ve had a year to mount a slick PR campaign to convince people the 1990 outages were a fluke,” he says. “It’s like the White Sox. We know we’d rather negotiate with a player after a bad year than after an MVP season. For us to ask for an extension was stupid.” In Bloom’s view, Daley was serving his own (and Edison’s) political interests rather than the city’s.
Accordingly, at the October 2 meeting of City Council, Bloom tossed a bombshell into what could have been a routine approval of a mayoral request. He offered an amendment to the extension, requiring Commonwealth Edison to pay its $70 million annual franchise fee in monthly installments rather than (as now) in one lump sum at the end of each year. Bloom estimates that this change would save the city $4 million in borrowing costs–money that might be used in many ways, among them compensating west-siders who lost food in last summer’s outages, or educating the city on conservation and franchise issues.
Bloom’s amendment opened the gates to a torrent of anti-Edison rhetoric, culminating in a parliamentary maneuver, by aldermen Allan Streeter and Jesse Evans, that put off the whole subject until October 31. Allan Streeter says he is not particularly concerned with the franchise: “Both the city and Edison will win on that. My concern is for the people on welfare who lost meat and milk in those outages and have no way to replace them. Very few aldermen even brought it up on the floor. Edison has an obligation to help those people. So we put this whole business on hold, until these people get some consideration.”
Bloom thinks his amendment would help the city regardless of Edison’s response. If Edison says, “No extension if you amend the payment schedule,” that’s fine: then the utility will look like it doesn’t want to pay its bills on time, and the franchise-renewal negotiations will proceed with Edison on the public- relations ropes. (Bloom doesn’t believe the administration needs another year to study the distribution system–if they were serious about acquiring Edison, they would have studied it sooner.) On the other hand, if Edison agrees to the extension with monthly payments, then the city gets its $4 million plus time to study and get the public educated and involved. (Edison spokesperson John Hogan says the company prefers no extension at all, or failing that an extension without changes, but he does not rule out the company’s agreeing to the Bloom amendment if it passes.)
Politically, too, Bloom thinks he’s in the catbird seat. “This postponement just gives the aldermen three weeks to feel the heat from their constituents. The Daley people don’t want to be in a position of asking aldermen to vote against something that would save taxpayers $4 million!”
But Bloom is not leading a united army of progressives. In fact, most of his natural constituency is marching the other way. The consumer groups favor the extension. Maureen Dolan, executive director of the Electric Options Campaign, fears that brinkmanship over Bloom’s amendment could jeopardize the city’s best bargaining chip–its option to acquire Edison, which expires December 28 if there is no extension. And Scott Bernstein, executive director of the Center for Neighborhood Technology, who serves on Daley’s Electricity Working Group and thus is close to the negotiations, believes the city has been doing well. CNT has been one of the city’s most persistent and best-informed Edison-bashers, so this is not an endorsement easily won. Bernstein says he would have resigned noisily if he didn’t think the city was doing the right thing. “So far I think the city’s been playing it straight. They’ve done just about what I would do if it were all up to me. The city knows its options and has a strategy.”
All of which adds to a mystery that was puzzling enough even before the extension issue came up. If the Daley administration is doing such a good job, why is it keeping such a low profile about it?
During 1988 and 1989, Edison spent more than $600,000 putting forth its position on the franchise, including literature that characterized the negotiations as a choice between irresponsible “extremists” and Edison professionals. Anti-Edison activists would like to see the city responding in kind–educating the public about the importance of the franchise, the improvements that could be made in the city’s electric service, and the alternatives the city has for pursuing those improvements. But the Daley administration doesn’t seem too interested in this sort of public relations. “There’s really not that much to say” about the city’s public-education effort, says Jessica Feldman, executive director of the mayor’s Electricity Working Group. “There’s just not as much interest in the franchise as the Electric Options Campaign would like there to be. I hate to say so, but it’s a dull topic to most of the world.”
The city has not quite done nothing, but despite CEOC pressures it has taken a very passive attitude toward public education. Feldman’s office does (1) answer individual letters; (2) accept some invitations to speak to neighborhood groups (but “we try not to go out if there are only ten people; frankly I prefer 100-150”–larger than your average block club); (3) make available copies of chief city negotiator Robert Helman’s excellent March statement on the options (for a time copies were stacked up at the City Hall information desk, “but it’s hard to keep track of when they run out–we’ve got other things to do”); and (4) plan to issue about 100,000 copies of a brochure on the franchise. The brochure has been hanging in bureaucratic limbo since April, and Feldman promises wide distribution whenever it does appear, but not in the style CEOC would like: “They wanted us to mail to every household in the city. But that is not a cost-effective way of communicating.”
What is cost-effective public education? “When there is news, it’s done through the press. It’ll get out there. At this point, what we do will depend on what’s occurring. Unless something is actually happening, there’s nothing to talk about.” Translation: franchise renewal is not like parking tickets, or recycling, or even planting trees; on this issue the city is not trying to mobilize public opinion.
Feldman has nothing against those who are trying–mainly the Citizens Utility Board (CUB), the Labor Coalition on Public Utilities (LCPU), and CEOC. (The three groups have separate identities and different emphases. CUB has a statewide constituency and deals with all kinds of utilities, so its attention to Chicago’s electricity franchise is somewhat diluted. The franchise has been LCPU’s main interest in recent months. CEOC exists solely to deal with franchise issues.) “I have only good things to say about what CEOC does,” Feldman says. “They’ve got access we don’t have, and that’s wonderful. But the city is not going to fund them for public education”–as was proposed early last summer. “Once we provide dollars, they lose their independence and we get tarred with whatever they do.”
Unfortunately, this praise reflects the city’s willingness to let these pitifully poor citizens’ groups handle the bulk of public education. The three-year-old CEOC’s total 1990 budget, cobbled together from a variety of small foundation grants, is $50,000–“and that was difficult to get,” says executive director Maureen Dolan, “because Edison is quite influential in this town. The burden on us is just tremendous.” To her, the notion that there is public apathy about electricity issues is hilarious.
“I do presentations on this subject every week. People can understand it. And keeping them ignorant is undemocratic. I feel very strongly that Edison’s franchise is a privilege, not a right. It is the democratic right of the people to look at this. You can’t just leave it to just a few guys in a back room.”
The city’s quiescence mystifies Dolan, especially because she believes that a better-briefed City Council might be more willing to unite on a single strategy. “It appears that they are afraid–truly afraid–of public involvement.” But one piece of recent history may offer a clue. The last time Richard M. Daley took a high-profile, high- risk stand on an energy issue–as state’s attorney–he joined with Governor James Thompson and Attorney General Neil Hartigan in promoting Commonwealth Edison’s 1987 rate “freeze” plan. The scheme fell apart under persistent questioning by consumer groups, and its advocates looked like utility stooges. It’s quite possible that Daley and his close aides see the franchise issue as a similar kind of no-win proposition. But their reticence, whatever its cause, is ammunition for the administration’s critics. “They’re cutting a deal in the back room,” the cynics say; “they’re not telling us what’s going on because they don’t want us to know.”
According to CUB president Josh Hoyt, Edison now faces a triple-threat year in 1991: franchise renewal; application to the Illinois Commerce Commission for yet another enormous rate hike; and increasing skepticism about the utility’s former trump card, reliability. The community groups’ public-education plans for 1991 are keyed into all three issues. CEOC intends to:
In the same vein but on a bigger stage, the Labor Coalition is considering trying for a citywide referendum on acquisition. Unlike the Options Campaign, the labor group has concluded that the city should definitely kiss Edison good-bye, acquire its in-city system, and then consider whether to set up a public power authority (as exists in Springfield, Seattle, and Los Angeles), lease the system to another utility to operate, or something else.
Of course, none of this will happen if Bloom has his way and negotiations conclude this year. And even if all of it does happen, it won’t necessarily guarantee us a better deal on the new franchise. Veteran activist Lew Kreinberg of the Center for Neighborhood Technology warns against expecting too much from community organizations alone. “You don’t beat Commonwealth Edison,” he says. “If you’ve read Forrest McDonald’s biography of [utility founder Samuel] Insull, if you see what they did to Rostenkowski [getting him to abolish, nationwide, the tax-free bonds that would have made a city acquisition much cheaper], then you know what kind of power you’re dealing with. You’re not going to outspend them. You’re not going to outthink them.”
What are you going to do, then?
“Expose their arrogance. If you give them enough opportunities, they will shoot themselves in the foot.”
Art accompanying story in printed newspaper (not available in this archive): illustration/Peter Hannan.