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The state senate’s recent vote on Marty Cohen’s nomination for chairman of the Illinois Commerce Commission shakes up more than a few preconceptions about party ideologies. The party of big business took a surprisingly strong stand for the consumer and against deregulation. The so-called party of the people hung one of their own out to dry and stabbed constituents in the back. Confirmation hearings are often brutal. But this vote left even insiders shaking their heads.
What’s at stake? Let’s start with the basics. The ICC, the state’s chief regulatory agency, determines how much we pay for gas, electricity, and other utilities. Cohen, the former head of the Citizens Utility Board, a watchdog group, is widely regarded as one of the state’s most knowledgeable experts on the intricacies of the industry. He’s a forceful consumer advocate who would have scrutinized the fine print to protect consumers against unwarranted rate hikes.
Currently the state is in the midst of an energy crisis, as the cost of electricity and gas rise faster than many people’s ability to pay. In 2005 gas bills rose by more than 30 percent over the previous winter, according to figures provided by CUB; last February the average household in Chicago paid about $225 in heating. This year’s bills are expected to go up another 50 percent, and electricity costs are expected to rise as well. According to the ICC, at least 35,000 local households are already without heat, and while it’s illegal for the gas company to shut it off between December 1 and April 1, come spring they’ll undoubtedly be joined by thousands more. People–especially the poor or working class and senior citizens on fixed incomes–could use an advocate at the head of the ICC. But on November 3 the state senate shot down Cohen’s nomination largely on the grounds that he was proconsumer.
“It was Alice in Wonderland,” says Bob Vondrasek, executive director of the South Austin Coalition advocacy group.
You can’t blame Cohen’s defeat on the Republicans. The Democrats have a senate majority. If they had simply voted along party lines, Cohen, a nominee tapped by a Democratic governor, would have been approved. He even had the votes of 13 Republican senators–not bad for a consumer advocate who supposedly has an ax to grind.
No, it was Democratic senators (and the senate’s lone independent, James Meeks) who did Cohen in. Seventeen voted against him, among them Jacqueline Collins, Rickey Hendon, Emil Jones, Iris Martinez, Tony Munoz, and Donne Trotter–black and Hispanic legislators from local districts whose constituents are most vulnerable to rate hikes. (James Clayborne Jr., a black senator from East Saint Louis, also voted against Cohen.) Plenty of white Democrats from less-than-affluent districts voted against Cohen as well: James DeLeo (from the city’s northwest side), Gary Forby (Benton), Debbie Halvorson (Chicago Heights), Terry Link (Lake Bluff), Edward Maloney (the southwest side), George Shadid (Pekin), John Sullivan (Quincy), Louis Viverito (Burbank), and Arthur Wilhelmi (Crest Hill).
Why? Most of the senators say they were simply following the lead of senate president Emil Jones. Jones himself says he felt Cohen would be biased against big utilities–particularly ComEd.
ComEd has been a generous contributor to Jones’s campaign coffers. Over the summer ComEd CEO Frank Clark feted Jones at a fund-raiser at his south suburban home. “The June 5 buffet-by-the-pool event generated about $127,000 in donations for Mr. Jones’ campaign war chest, accounting for 14% of the Democratic leader’s haul so far this year,” Crain’s Chicago Business reported in late August. “At least $78,000 of the contributions came from dozens of executives and board members with ComEd and parent company Exelon Corp., as well as ComEd and power industry lobbyists.”
But many statehouse insiders see the Cohen vote as a proxy in a larger fight between Blagojevich and ComEd over deregulation. Earlier this year ComEd put forth a modest proposal: instead of the ICC setting the rate it operates under, the market should determine how much consumers pay for electricity. Specifically, ComEd wants to set up an auction at which different providers bid for the right to sell them power. In the short term, the company concedes, deregulated electricity rates could rise as much as 20 percent. (Consumer advocates say the rate increase could be as much as 50 percent.) But in the long run, ComEd says, consumers will benefit because competition between bidders at the auctions would lower the cost of electricity.
Attorney General Lisa Madigan has strongly opposed ComEd’s proposal, contending that there aren’t enough electricity providers to guarantee legitimate competition in an auction. Indeed, the largest provider of electricity in the state is Exelon, ComEd’s parent company. If ComEd gets its way on deregulation it might wind up holding an auction at which its parent company is the dominant bidder. Sounds more like a monopoly than a market.
Governor Rod Blagojevich stayed out of the fray until August 31, when he jumped in with a strongly worded letter to the ICC’s five commissioners. Deregulation, Blagojevich wrote, should be allowed only when “a competitive market will drive down retail rates and make regulation unnecessary.” But “to date, this competition has still not yet developed for most markets, especially the market for residential ratepayers. Therefore, the principles of deregulation have not been achieved.” In the letter Blagojevich reminded commissioners that he’d appointed them “to protect the consumer” and that it was their job “to ensure that rates remain just and reasonable.” He warned that he’d consider approval of ComEd’s proposal by the ICC to be “a serious neglect of duty or gross incompetence.”
Blagojevich closed by vowing to “take whatever action is necessary to protect the public and ensure that the law is followed. Unless and until a competitive market develops, the request for higher rates must be rejected.” The way folks at the ICC saw it, he was threatening to unseat any commissioner who voted for the ComEd proposal. “He let us know who appoints commissioners, and then he let us know that he would take drastic action,” says an ICC insider. “The message was very clear.”
Three weeks after Blagojevich wrote that letter, Ed Hurley, the ICC chairman, resigned to take a job in the governor’s administration. Blagojevich then tapped Cohen to fill Hurley’s vacancy.
“First Blagojevich writes the letter, then he replaces Ed with Marty, who had already come out against the ComEd proposal–this was high-stakes politics,” says the ICC insider. “This is complicated stuff, and the utilities use that to their advantage. But they can’t get away with that with Marty. He’s been doing this stuff for 20 years. He knows the issues as well as ComEd’s guys.”
With Cohen on board as chairman, ComEd would have faced a difficult battle over deregulation. But then the senate torpedoed Cohen’s nomination. “If you view the vote on Marty in terms of these other issues, the senators were being used to send Blagojevich a message: ComEd wasn’t going down without a fight,” says the insider.
Now, it’s understandable why a big-business Republican or a free-market libertarian would allow himself to be used as a tool in ComEd’s fight for deregulation, particularly if he comes from a district wealthy enough to sustain soaring rate hikes. But Jones? He represents Roseland, an impoverished neighborhood on the far south side. The state doesn’t track gas shutoffs by zip code or neighborhood, so I can’t tell you how many of Jones’s constituents are currently without heat. But consumer activists from CUB and other community groups tell me Roseland has one of the highest shutoff rates in the city. At the very least it’s safe to say that if you stood outside Jones’s service office at 507 W. 111th, you’d be hard-pressed to find any passersby who’d want their senator voting against Cohen because he’s tough on big utilities.
So Jones, like the Democrats who followed him, took a stand his constituents would oppose–if they knew he was taking it. “Harold Washington is probably turning over in his grave,” says one high-ranking black state official. “The only thing I can tell you is that the black community is asleep. If they were paying attention they’d be raising hell over this.”
The anti-Cohen vote has left many south- and west-side activists sputtering mad. “I don’t blame any of these guys for taking ComEd’s campaign contributions–everybody takes money from ComEd, even us,” says South Austin’s Vondrasek, who estimates that there are about 4,000 households without heat in Austin. “But just because you take their money doesn’t mean you have to sell out.” Madeline Talbott, executive director of the community group Illinois ACORN, says her organization is spreading word of the Cohen vote in voter registration drives in Hendon’s district. “Heat is our Katrina,” she says.
Ironically, the senate’s stand against Cohen may come back to haunt ComEd. Blagojevich has vowed to nominate another consumer advocate to fill the ICC chairmanship.
“I don’t know if the senate’s going to muster up the votes to do again what they did to Marty,” says Lieutenant Governor Pat Quinn. “It’s a real shame what happened to Marty. I believe he would have made an outstanding chairman. But this is only the opening round.”
Art accompanying story in printed newspaper (not available in this archive): photo/Brent Hanson–Illinois Commerce Commission.