Judge: Power to the People or Pay the Price

January 29, 2013 by   - () Comments Off on Judge: Power to the People or Pay the Price

Commonwealth Edison Co. (ComEd) in Chicago must reimburse customers who suffer losses after extensive power outages due to storms, an administrative law judge has determined.

But the circumstances in which ComEd would have to cover damages for customer losses such as food spoilage would be narrow, according to the Jan. 25 order, which now goes to the Illinois Commerce Commission (ICC) for a final decision, Crain’s Chicago Business reported.

The proposed ruling comes in the context of the intense 2011 summer storm season, which knocked out the lights for hundreds of thousands of people, many for days at a time. ComEd had sought assurance from the ICC, which regulates utilities, that it wasn’t liable for customer losses during a remarkably harsh storm season. After sorting through the precise cause of hundreds of thousands of outages and eliminating ones deemed “unpreventable,” the judge determined that 34,559 customers whose power was out at least four hours after the storm of July 11 could be eligible for damages.

That was the worst storm of a summer full of them. The July 11 derecho knocked power out for more than 800,000 customers. More than 400,000 of those were in the dark for at least four hours, the threshold in state law for when utilities potentially must reimburse customers.

At least as importantly, the ruling would allow municipalities to seek reimbursement from utilities for the cost of providing emergency services during extended outages.

ComEd’s position in the ICC case was that the state law doesn’t apply to outages tied to intense summer storms. The utility argued that it could be liable for massive damages if it had to reimburse customers for the effects of weather events. Indeed, ComEd hasn’t once paid damages since the law’s 1997 passage.

“We think this is an important precedent,” said David Kolata, executive director of the consumer watchdog Citizens Utility Board, which called for the commission to rule that the state law on outage claims applies to storms. “We think the law was pretty clear in its intent. The argument (ComEd) made would have rendered it null and void and of no import.”

In a statement, ComEd said, “We understand the difficulties customers face when they’re without electricity for any extended period. At the same time, we maintain that all of the interruptions in all six of the 2011 storms were caused by acts of nature beyond ComEd’s control.”

ComEd added that the proposed order “rejects any allegations related to the quality of ComEd’s system. … We are still assessing the proposed order and what the potential costs could be if the ICC were to come to a similar decision. … We can’t speculate as to whether we will appeal or not until we see the ICC decision.”

If the commission agrees with the judge, ComEd in the future will have to seek waivers from the commission for days in which at least 30,000 customers are without power for at least four hours to avoid having to pay damages. Outages that can be tied clearly to lightning, uprooted trees, broken tree limbs and winds exceeding 60 miles per hour would count as unpreventable and not subject to reimbursement.

Under those terms, ComEd doesn’t have to pay damages for five of the six summer storms in 2011 that caused at least 30,000 customers to lose power for at least four hours. The one exception was the July 11 storm, the worst in more than a decade.

ComEd said it had 5,800 people working around the clock in staggered shifts of 16 hours to restore power after the July 11 storm. That included 429 crews made up of contractors and outside utilities from as far away as Alabama and Georgia—the most ComEd ever has used.

The judge agreed with ICC staff that ComEd’s equipment was up to standard and that its restoration efforts were “reasonable.” The judge also reduced the number of customers eligible for damages to 34,559 from the 51,767 proposed by ICC staff.

Illinois Attorney General Lisa Madigan had called for a far larger number, arguing that ComEd’s lack of investment in tree trimming and other maintenance had led to many of the outages.

In a statement, a spokeswoman for Madigan said, “We’re disappointed that the ICC took such a narrow approach to determining potentially eligible customers. We believe ComEd has systematically under-invested in equipment and infrastructure that would have minimized the effect of the storms and, thus, storm-related damages to its customers.”



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