The chair was pulled out from under Cohen

by Mike Kroll

The Citizen's Utility Board, better known as CUB, was founded 21 years ago by the Illinois legislature to represent the interests of consumers in matters regarding utility rates and policies. For the last 12 of those years Martin Cohen has been executive director and the very public face of the consumer advocacy group, until he was appointed as chair of the Illinois Commerce Commission by Governor Rod Blagojevich. The ICC is responsible for overseeing the operation and rates of private utilities in Illinois and the governor's appointments must be confirmed by the State Senate. The process is so mechanical that no governor's appointment had been denied confirmation since the 1970s-- until last week.

In what at first glance appeared to be a close vote the Illinois Senate failed to confirm Cohen who need 30 votes but received only 28; but senate insiders noted that the carefully orchestrated vote was designed to permit senators facing reelection to make a “pro-consumer” vote while still guaranteeing that Cohen not be confirmed. While nine Democrats voted “present” all eleven Democrats and eleven Republicans up for reelection next year were free to vote “yes” without fear because those “present” votes were counted as veiled “no” votes. A bi-partisan group of senators led by president Emil Jones (D) and Republican Senate Leader Frank Watson claimed that Cohen would be too biased against the utility companies to be an impartial arbiter on the commission. That was the only complaint voiced against Cohen. What is well documented is that Jones and Watson, like numerous other senators, have been recipients of substantial contributions from utility interests (for example, well over one-half million dollars just between Jones and Watson since January 1 2003) who certainly didn't want their longtime foe heading the ICC.

Nobody questioned Cohen's credentials for the chairmanship of the five-member commission nor have past ICC appointments been turned away due to their coziness with the utility industry itself. In fact Cohen was the first ever ICC appointment to not be confirmed by the state senate. There is no question that Cohen's appointment “represented a great victory for consumers” as noted by CUB president Randy Fritz, “but then the purpose of the ICC was to look out for the public interest in utility matters so that can hardly be seen as a conflict of interest to anyone but the utilities themselves. I know Marty very well and I do believe he was very fair and he has an indisputably depth of understanding of the issues. He would have bent over backwards to be fair but he certainly wasn't going to simply roll over for the utilities.”

Fritz is a teacher in Williamsfield, a Knox County resident and one of 14 current members of the CUB board elected by Illinois congressional district (several areas have no current board representation) to lead the non-profit, non-partisan group that represents consumers before the ICC at rate and regulatory hearings. “Since our founding it is estimated that we have saved Illinois utility customers over $10 billion by blocking rate hikes and promoting regulatory reform. Perhaps one of the lessons of this experience is that CUB was too identified with one person, Marty Cohen, and that worked against both of us. Marty will land on his feet and CUB will continue to effectively fight the utility companies. Our record speaks for itself-- we have been able to do stuff that an organization like CUB shouldn't have been able to accomplish.

With his poll numbers low and falling there has been speculation that Blagojevich may have simply used Cohen as a sacrificial pawn. After all he has a long close history with utility interest money himself and he did very little to promote or assist Cohen's confirmation. On the other hand utilities Commonwealth Edison and Ameren made no secret of their displeasure in the Cohen appointment as they prepare for ICC hearings on proposals that could lead to substantial increases in electrical rates-- perhaps as much as 37 percent. According to David Kolata, who replaced Cohen as executive director of CUB, “ComEd’s rate hike proposal would give a whole new meaning to the words ‘electric shock' after the company used its political muscle to try to keep a consumer advocate off the ICC at precisely the time when we need one the most – largely because ComEd is trying to mistreat consumers.” Kolata isn't among those who blame Blagojevich for Cohen's plight, “The Governor and his people did all they could to get Martin confirmed and [the governor] has pledged to appoint yet another consumer-friendly person to chair the ICC.”

Kolata points out that the Illinois electrical generating power market is heavily concentrated in only three companies, Exelon (parent of Commonwealth Edison), Midwest Generation and Ameren (parent of Illinois Power and CILCO), and as the deregulated portion of the industry these companies are in position to force substantial rate increases through their regulated electrical delivery sister companies merely by charging more for the generated power sold via “auction.” In the view of Kolata this is a thinly disguised means to circumvent the entire regulatory process. The competition that was predicted following the 1997 deregulation of electrical power generation never materialized and in fact has actually diminished following a spate of mergers and acquisitions of Illinois utilities. Meanwhile the parent companies of these utilities experienced record profits during this period.

CUB has always been strong in this area and both Fritz and Kolata are committed to building the group further. “One of my priorities will be to do more community outreach and work hard to recruit additional CUB members,” said Kolata. “We have withstood the pressure from extremely well-financed utility interests for over two decades,” said Fritz, “we will continue to honor our commitment to Illinois consumers at a time when the actions of the utility companies cannot help but swell our member ranks.”

Two things are abundantly clear from this chapter. First is that only the naive can continue to claim that the supposedly non-political state regulatory agencies actually operate that way. Otherwise the charge that anyone on the ICC was too pro-consumer would be seen as the absurdity that it is given the agency's mission. Second is that regardless of the posturing it remains painfully clear that Illinois' porous campaign financing rules are an invitation to special interests to buy friendly legislation regardless of how politically unpopular it might be. Try to find any voter who doesn't favor tight reigns on utility rates, it can't be done-- yet this episode proves well that a well financed special interest campaign trumps the politically popular. As presently constituted the ICC doesn't even present a speed bump to the efforts by the utility companies to escape regulation of rates or performance and they damn well want to keep it that way.

11/17/05