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ComEd hit with $182 million class-action lawsuit over 'smart-meter' program delay

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SPRINGFIELD-Four plaintiffs brought a $182 million class-action lawsuit Thursday against Commonwealth Edison for allegedly violating an order to begin installing the utility's energy-saving 'smart meters' by fall 2012 on Chicago's South and West sides.

The lawsuit is in response to 2011 legislation that included rate increases to bankroll a $2.6 billion initiative to upgrade ComEd's electrical "smart-grid," improve system reliability and install smart meters at all consumers' homes and businesses.

As part of that original plan, the Illinois Commerce Commission instructed ComEd to begin installation of the new smart meters in the Chicago area by fall 2012 and finish by the end of the next year. But following the ICC's more than $100 million cut to ComEd's proposed rate increases, the utility claimed the upgrade would be stalled for at least two years.

Last December, ComEd won a battle with the ICC when the commission agreed to the utility's request to delay rollout of the smart-meter program until 2015. But Paul Neilan, the Chicago energy attorney representing the plaintiffs, told the Sun-Times that the ICC only agreed because ComEd's violation of the original order left it no choice. Neilan called ComEd's delay the "biggest bait-and-switch in Illinois history."

"Well, that's fine," Neilan said Friday of the most recent ICC order. "But that order did not go back and excuse the violation of the previous order. [ComEd] can't profit from its own wrongdoing."

But ComEd claims it is in compliance with the ICC ruling.

"The lawsuit is baseless and completely without merit," a ComEd spokesperson said. "ComEd remains committed to completing the 10-year smart-grid program, including the installation of nearly 4 million smart meters throughout our service territory."

In ComEd's most recent report to the ICC, the utility claimed that even if it were required to begin installation, it would at most only be able to install 60,000 meters by the end of the year- about 15 percent of the 385,000 that would have been installed in 2013 under the original order, Neilan said. Neilan claims a ComEd expert witness testified that customers would have saved $182 million if the utility had followed the ICC's original schedule.

"ComEd sold this legislation on the benefits of smart meters, and customers have already started paying for them," Neilan said in a prepared statement. "But then ComEd took the law into its own hands and willfully defied an order of the ICC."

Meanwhile, the Illinois Legislature recently sent a bill to Gov. Pat Quinn's desk that would boost ComEd's rates by $70 million annually to restore some of the $100 million in rate cuts imposed by the ICC last year. The plan would give the utility 10 years to complete modernization of its smart-grid, and customers would not see rates increase until 2014 when their monthly bills would jump initially by 40 cents.

"[The bill] is a stealth statute because buried deep in the bill is language that attempts to re-write history and erase ComEd's violation of the ICC's order," Neilan said. "That provision is invalid on its face. It's also equivalent to a signed confession."

Still, ComEd contends it remains aligned with the ICC's guidelines for smart meter deployment.

"Senate Bill 9 provides the path to accelerated deployment of smart meters. We continue to work with the [ICC] to ensure transparency as we modernize the electric system and give customers more control over energy consumption and costs," the ComEd spokesperson said.

While Quinn has openly opposed the legislation, it received enough support in both chambers of the Legislature to override a potential veto from the governor. Quinn has 60 days from the time the bill passed on March 21 to make changes or else the bill becomes law. General Lisa Madigan also opposes the measure.

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