Governor Rod Blagojevich
finally started showing a little of that "New Way" of doing business
last week that he has promised for so many years but so often failed to
deliver.
Since Day One, Gov.
Blagojevich has been deep in the pockets of the state's utility industry. He
has supported just about every major utility initiative of the past three
years, including hugely controversial proposals by phone giant SBC and electric
utility Commonwealth Edison.
Blagojevich openly worried
in 2001 that if an SBC-backed measure wasn't approved by the General Assembly
the company would leave the state - completely swallowing the company's most
outrageous talking point and shattering his own credibility.
A few months later he
supported a deal that would have allowed ComEd to swallow up Illinois Power,
which consumer activists and House Speaker Michael Madigan sharply criticized
for containing a "secret" consumer rate increase.
Mostly out of public view,
the governor has appointed three members of the Illinois Commerce Commission
who have been more than just friendly with utility interests.
Commerce Commission
Chairman Ed Hurley, elevated to the chairmanship by the governor, has always
been a reliable vote for the utility interests. He was also recently excoriated
by Illinois Attorney General Lisa Madigan for possibly violating state ethics
laws by allowing a utility company to pick up the tab for a secret birthday
luncheon in Chicago. Hurley repaid his share, but Madigan wasn't impressed.
Madigan has since launched
a full-scale corruption investigation of the Commerce Commission's relationship
with utilities, particularly Peoples Energy - the gas company for most of
Chicagoland. Commissioner Erin O'Connell-Diaz has been criticized in print for
accepting favors from Peoples.
O'Connell-Diaz was
elevated from a Commerce Commission administrative law judge to ICC commissioner
by Blagojevich shortly after she ruled in favor of Peoples by stopping an
investigation into its relationship with the infamous Enron company. A
different ICC judge ruled last week that Peoples owed customers more than $100
million in refunds for the alleged shenanigans with Enron.
The governor boasts about
being a progressive populist, but his slavish deference to utility monopolies
was about to be seriously undermined by Lisa Madigan's investigation.
The chickens were about to
come home to roost with ComEd as well. The electric utility was mostly
deregulated in the late 1990s, but its consumer rates were frozen for ten
years. That rate freeze is set to expire in 2007, and ComEd wants to use a
controversial power auction system that it admits could hike rates by 20
percent.
When Blagojevich realized
what that could mean to his re-election campaign next year, he demanded that
the ICC reject ComEd's auction plan and come up with something else,
threatening to fire every commissioner if they didn't heel to his command.
ComEd retaliated by
cutting off talks for a massive wind-generation project - a project which the
governor holds near and dear to his heart.
So, the governor upped the
ante.
Chairman Hurley was forced
to resign on Wednesday. Numerous sources say Commissioner O'Connell-Diaz has
been ordered to quit or be fired, but as of this writing she has reportedly
signaled her intention to fight the governor's edict. The third pro-utility
commissioner, Lula Ford, has been given a pass, probably because she is an ally
of powerful Senate President Emil Jones.
Chairman Hurley was
replaced with Marty Cohen, the longtime director of the pro-consumer Citizens
Utility Board. ComEd's stock dropped over 4 percent the day Cohen's appointment
was announced.
The governor's move
against the ICC drew the ire of utilities, organizations that represent big
business and the Chicago Tribune editorial page as an unprecedented assault on
an "independent" body.
The truth is that the ICC
hasn't been "independent" for years, particularly since this governor
took office. The commission has been a blatant tool of the industries it's
supposed to regulate. Chairman Hurley was heard by several witnesses one
evening loudly threatening to eliminate the Citizens Utility Board from the
face of the earth. His replacement by CUB's former director must have been a
bitter pill.
The bottom line here is
that the governor has finally fought an opponent that mattered. ComEd, SBC and
Peoples are not straw men created to provide a convenient shadow-boxing enemy -
the governor's usual approach to bolstering his poll numbers. Yes, he may have
overstepped his bounds, but he did so to correct a grievous error he made
almost three years ago when he signed on to the utilities' agendas.
-30-
Rich Miller also
publishes Capitol Fax, a daily political newsletter. He can be reached at
capitolfax.blogspot.com.rtf (RTF /ÇICÈ) (000FC2CD)