Commonwealth Edison starts unregulated subsidiary



SPRINGFIELD, Ill. (AP)—Within days of obtaining unprecedented legislative approval, the state’s largest utility started an unregulated subsidiary to compete for alternative energy markets.

Although Commonwealth Edison Co. won the battle to create the sister company, another clash is brewing.

Commonwealth Edison wants to give its master list of customers to its new subsidiary, Ceco Inc., also called Northwind Inc. To release the list, Edison must obtain approval from the Illinois Commerce Commission.

Critics say releasing the list would pave the way for the parent company to steal its own best customers and try to raise residential rates to make up for the lost income.

And, they contend, it would be an invasion of privacy.

‘‘It would be the basis for cherry picking,’‘ said Martin Cohen, acting executive director of the Citizens Utility Board. ‘‘That information is what they would need to identify who are the most ripe cherries to be picked.

‘‘This confirms our fear that the company intends to aggressively market its own customers base rather than expanding,’‘ he added. ‘‘That poses a danger to ratepayers. We may get stuck holding the bag.’

CUB estimates the new law will end up costing residential customers more than $500 million in the next decade.

As part of a budget deal hammered out in July, the Legislature allowed companies with more than 500,000 customers to start subsidiaries without going through the ICC. Previously, they had to apply to the ICC and the process took several years.

Edison and Illinois Power Co. are the only two utilities that qualify under the new law. Illinois Power went through the ICC process to obtain approval to start a sister company and the case is pending. Edison relied on the new law.

Even though they can start the sister companies, the ICC must approve any transactions between the parent and subsidiaries.

Commonwealth Edison officials submitted two requests to the ICC: one to allow them to release their customer list, the other to allow Edison and Ceco to do business.

The ICC is expected to hear the cases in Chicago on Wednesday.

Commonwealth Edison seems confident it will obtain ICC approval of its filings.

‘‘It’s very basic. It’s perfunctory,’‘ Edison spokesman John Hogan said.

Hogan dismissed concerns the company would woo away its best customers.

If Edison wasn’t allowed to expand its market, it would have lost business, he said. Losing business would have forced the company to raise rates, he added. The new opportunity allows the company to expand and retain customers.

‘‘The menu of services is growing all the time. Either you expand your menu or you lose out to the competition,’‘ Hogan said. ‘‘You either provide the services to customers or they’ll find someone else that will.’‘

He also waved away the concerns that releasing the master list would be an invasion of privacy.

‘‘It’s all still part of the larger company. Even though we are into the subsidiary business, we are still partners,’‘ Hogan said.