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Commonwealth Edison, Doing Things Wrong



To the editors:

The Illinois Safe Energy Alliance (ISEA), a coalition of denuclearization, safer energy, and environmental groups that was founded in 1975, would like to thank writer Harold Henderson for the article "Commonwealth Edison Has a Deal for You" (April 10). Under Edison's plan, the utility would receive an automatic $660 million electric rate hike in July of this year to be in effect for the next five years. (This action would cost the average residential ratepayer around $100 to $150 per year.) Consumers would be forced to pay $3.3 billion over the five-year period for the utility's three new, unneeded nuclear reactors -- Byron Unit 2, Braidwood Unit 1, and Braidwood Unit 2.

According to Mr. Henderson, businessman Samuel Insull, who merged Chicago Edison and Commonwealth Electric Company into Commonwealth Edison, and his successors "would entice customers to use more electricity by cutting prices and promoting appliances. (Edison salesmen peddled electric fans door-to-door during the summer. In 1908, company canvassers passed out 10,000 General Electric irons for housewives to use, free, for six months.) Then they'd scramble frantically to build ever larger power plants in order to meet the increased demand and cut prices still further."

As the article continues to point out, Edison's rates dropped without interruption from 1892 to 1954. It was not until the 1970s that they started to substantially increase. ISEA wishes to point out that the electric utility industry is no longer a "declining cost" industry because of what energy researchers such as myself call the "diseconomies of scale." These disadvantages of large-scale and highly centralized power stations include the increased likelihood and consequences of failure and disruption, massive capital costs and capital intensiveness, the costs of transmitting and distributing electricity over greater distances, and longer lead times for construction and deployment due to technical complexity. Today it costs more to build, operate, and maintain additional nuclear power plants.

According to physics professor Dr. Arthur Rosenfeld and physics graduate student David Goldstein with the University of California at Berkeley: "Today it is generally cheaper (using life-cycle accounting) to save energy with more efficient buildings, products, and management, than it is to produce more energy. If one takes into account the whole energy balance -- supplier plus consumer -- it is almost always cheaper to save a kilowatt (kW) of peak power than it is to invest about $1,000 for new electric capacity." (Arthur Rosenfeld and David Goldstein, "Conservation and Peak Power: Cost and Demand," Not Man Apart, Volume 6, Number 2, San Francisco, California: Friends of the Earth, February, 1976.)

Energy consultant and physicist Amory Lovins, research director for the Rocky Mountain Institute, showed in meticulous detail how Edison and the ratepayers could have both won by immediately canceling both units of the Braidwood nuclear station. The full use in northern Illinois of the best electricity conserving technologies on the market today can save about three-fourths of the electricity now being consumed. We could accomplish this goal more economically than just the cost of running Braidwood. If Edison would have abandoned Braidwood Units I and 2, and gave away extremely efficient lights, motors, appliances, and building improvements, the electric utility would have saved, in net present value, at least $6 billion to $8 billion. This would have been enough to repay the more than $3 billion that investors have sunk into construction so far and cut rates for customers by $3 billion to $5 billion. (Amory Lovins, Least-Cost Electrical Services as an Alternative to the Braidwood Project, Testimony Prefiled Before the Illinois Commerce Commission, July 3, 1985. "Four Wins for Least-Cost Utility Policy," RMI Newsletter, Old Snowmass, Colorado: Rocky Mountain Institute, September 24, 1986.)

Unfortunately, the Illinois Commerce Commission rejected the Rocky Mountain Institute's "win-win" strategy as "unfeasible" and "not workable." In a live debate about Braidwood that I had with Frank Clark, an Edison representative, on WBEZ Radio's "Studio A" show, this unwise decision was repeated by Mr. Clark. Ironically, as previously mentioned, Edison used to advocate fans and irons to encourage the consumption of electricity but now will not avail itself to aggressively push measures to save electricity (which would save money at the same time) as viable alternatives to additional unnecessary and uneconomical nuclear power plants.

Energy consultant Lindson Anerson, ISEA cochair, in Palatine, Illinois, makes the important point that the nuclear age is over because the current state-of-the-art technologies in the energy efficiency field make obsolete all the nuclear reactors in the nation (especially those owned by Edison). According to Mr. Anderson, a $4 billion investment (less than Edison's own estimate for completing Braidwood Units 1 and 2, $5.05 billion) put into superefficient Philips light bulbs and refrigerator/freezers in northern Illinois could replace all of Edison's nuclear reactors by the end of the century. There would be a de facto exclusion of this least-cost efficiency strategy if the ICC approves Edison's rate hike plan.

Continuing on, Commonwealth Edison's energy conservation program is the worst program of its kind for an electric utility the size of Edison. In terms of promoting consumer energy efficiency, Edison's management is far behind Southern California Edison, Pacific Gas and Electric, the Northwest Power Planning Council, Pacific Power and Light, the Bonneville Power Administration, and Northern States Power Company. For example, Pacific Gas and Electric pays its Californian customers up to $300 per peak kilowatt to use very efficient Philips light bulbs. The Northwest Power Planning Council for Oregon, Idaho, Washington, and Montana treats energy conservation as a resource which can be managed to meet most uncertainties, and it is given a 10 percent cost advantage over nuclear power. The Hood River Conservation Project is a major residential demonstration project sponsored by the Bonneville Power Administration and run by Pacific Power and Light. (See the proceedings from "Least-Cost Energy Planning in the Midwest: A Symposium," The Palmer House, Chicago, Illinois, February 10 and 11, 1987.)

While the Illinois Safe Energy Alliance recognizes the past good work by Cook County State's Attorney Richard Daley on electric utility issues, ISEA remains unconvinced by the letter by Terry Levin, Press Secretary (May 8), which implied that Edison's latest proposal will benefit consumers. Instead of joining Edison in seeking the biggest electric rate thike in the state's history, Mr. Daley and his office should work with ISEA, the Citizens Utility Board (CUB), Business and Professional People for the Public Interest (BPI), and other groups in fighting Edison's request, and asking the ICC to cut Edison's rates by at least $400 million yearly. (Such a reduction would save the average residential ratepayer around $53 per year.) The next step is for Mr. Daley and his office to push for an ICC investigation in order to determine what other rate reductions Edison's customers are entitled to.

Dennis R. Nelson

Energy Researcher

Illinois Safe Energy Alliance

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