Are you OK with regulators allowing utilities to charge you more for electricity and heat just to make sure union contractors stay employed?
Trade unions lobbying in Springfield want Illinois law changed to produce precisely that result.
Legislation moving in the capital and backed by influential unions including one of the most politically potent, Local 150 of the International Union of Operating Engineers, would for the first time require the Illinois Commerce Commission to take into account potential loss of union jobs in their rulings on utilities’ rate-hike requests.
This measure is far more than a reporting requirement. It carries legal weight and would add a major new element to what utility regulators currently must balance when utilities come with their hands out.
As it stands, state law essentially requires the ICC to weigh consumers’ interests (such as affordability) against the need to preserve the financial health of utilities like Commonwealth Edison and Peoples Gas, in addition to improving the environment and preserving service reliability. If regulators fail to do so, both utilities and consumer representatives can challenge their decisions in court.
This bill, though, could open the door to unions or utilities (or both) mounting court challenges to ICC rulings not to their liking on the basis of the effect on the jobs of utility contractors. The requirement would be triggered if the commission or any participant in a rate-hike proceeding estimates 50 or more more union jobs hang in the balance of a rate-hike request.
This would be terrible policy. Trade unions have no “right” to a set number of permanent jobs provided by regulated monopolies. The utility revenues on which those union jobs depend come not from government but from you, us and everyone else with homes or businesses that need power and heat. Utility bills aren’t taxes technically, but they might as well be. And state government plays a crucial role in what heights those bills reach. And we hardly need to point out how difficult so many Illinoisans have in paying those monthly costs.
You might be wondering why such an absurd proposal would be given any consideration at all. Yet the House Public Utilities Committee unanimously approved it last week.
This bill is a reaction to Gov. J.B. Pritzker’s move last year to overhaul the five-member ICC. With the appointment of Chairman Doug Scott and two other commissioners, he made it far less beholden to utilities than it has been for much of the past 50 years and more attuned to consumer concerns. Every major utility in the state — including ComEd, Peoples and suburban gas utility Nicor — last year filed for record-setting rate hikes, and the commission rebuffed the vast majority of their proposed capital spending and resulting price increases.
In the case of Peoples Gas, which delivers gas in the city of Chicago, the regulators killed that utility’s wildly overbudget and ill-conceived project to replace virtually all of the gas pipes below Chicago’s streets. Peoples responded by laying off more than 700 union pipe workers.
Local 150 and other unions were outraged and promised to fight the ICC in Springfield. Their anger has taken multiple forms, including opposing Senate confirmation of two Pritzker appointees to the ICC, who coincidentally are scheduled for consideration in the Senate Executive Appointments Committee on Thursday. Pritzker rightly has stood his ground and supported Scott and the rest of the commission, including by spending his own money on advertising countering union attack ads against the ICC.
Utilities and their co-dependent unions seem to have come to view ever-increasing capital budgets, and the resulting rate increases covering the cost of those outlays (plus a regulated profit), as a permanent feature. But utilities are — or should be — no different than other industries or public works. Capital spending rises and falls. When capital projects are completed, and budgets then (temporarily) decline, contract workers no longer are needed in the same numbers. That’s just a reality of doing business.
In the past, at least in Illinois, what immunized utilities from the budget cycles common to other capital-intensive industries is that they could turn to friendly lawmakers to rubber-stamp spending plan after spending plan, keeping the rate hikes coming and the gravy train running. It’s a new day, and they don’t like it one bit.
Pritzker is doing his part to ensure that trade-union temper tantrums don’t return Illinois to the days when utilities called the shots in Springfield.
Keep up the good fight, governor.