TRANSMITTAL LETTER FOR BOARD MEETING OF SEPTEMBER 5, 2024
COMMITTEE ON PROCUREMENT
Mr. Brian A. Perkovich, Executive Director
Title
Authorization to join the coalition, REACT, to represent the District’s interests before the Illinois Commerce Commission in ComEd Rate Design proceeding, ICC Docket No. 24-0378 and issue a purchase order and enter into an agreement with REACT’s counsel, CJT Energy Law, LLC, in an amount not to exceed $35,000.00, Accounts 101-67000/68000/69000-612150, Requisition 1623136
Body
Dear Sir:
On May 23, 2024, ComEd filed a rate design investigation case with the Illinois Commerce Commission (ICC) in which the ICC will decide how ComEd recovers costs on the delivery services portion of customers’ electricity bills. The case is filed under ICC Docket #24-0378. The initial round of testimony was filed by ICC Staff and several intervenors including REACT (Request Equitable Allocation of Costs Together) on July 24, 2024; ComEd will file its responsive testimony on August 19, 2024; additional testimony from ICC Staff and intervenors is due September 16, 2024; evidentiary hearings are scheduled to be held on October 10-11, 2024; and the final order by the ICC is due by January 23, 2025. If ComEd’s proposed rate design is approved, the District’s electricity expenditures may be inflated by an estimated amount of approximately $1,000,000 annually.
Under the proposed rate structure, costs for Beneficial Electrification (i.e. programs primarily associated with EV charging stations) will be disproportionately allocated to large energy users, rather than to those customer classes that primarily benefit from those programs. Also, it is REACT’s position that overhead costs associated with ComEd providing supply services are being recovered from customers like the District who do not take supply service from ComEd. It is recommended that the District oppose these improper cost allocations and advocate for a more appropriate cost-recovery methodology (e.g. so the customer classes that benefit from programs pay for the associated program costs) by joining the coalition called REACT. The REACT group was formed by some members of NEU (Northern Illinois Energy Users), an ad hoc association of some of the largest industrial, commercial and institutional energy users in the Chicago area who will all be adversely impacted by ComEd’s proposed rate design. In prior ComEd ICC proceedings from 2008 to 2017, the District joined as a member of REACT, which was able to delay and reduce proposed rate increases at a total savings of approximately $3.76 million for the District.
REACT has retained the law firm of CJT Energy Law, LLC to represent it in the ICC rate design proceeding. Christopher Townsend is the lead attorney in the case. Mr. Townsend has more than 25 years of experience in representing large commercial users before the ICC, including having previously represented the District as a REACT member in prior ICC proceedings addressing similar issues. REACT also has retained Brad Fults of Progressive Energy Solutions, LLC and Mark Pruitt of the Illinois Power Bureau to address large consumer-related rate design issues, including the allocation of Beneficial Electrification and supply overhead cost issues. Each of the experts, who will testify in the rate design case, likewise has more than 25 years of experience addressing energy issues in Illinois. Attorney’s fees and costs, along with expert witness fees and other costs of litigation, are being shared by coalition members.
REACT’s total legal expenses, expert witness fees, and costs associated with the large customer-related issues have been capped at $110,000.00. These costs will include expenses such as discovery, motion practice, retention of expert witnesses, preparation of multiple rounds of testimony, participation in the evidentiary hearings and submission of briefs until the ICC issues a Final Order in the case. It does not cover potential costs of oral argument (which the ICC may request at its discretion). These large customer-related costs will be apportioned among coalition members, with the District’s share of costs capped at no more than $35,000.00.
In view of the foregoing, it is requested that the District be authorized to join the REACT coalition. It is further requested that the Director of Procurement and Materials Management be authorized to issue a purchase order and enter into an agreement with CJT Energy Law, LLC to represent the District and the REACT coalition in the ICC proceeding in an amount not to exceed $35,000.00. Because CJT Energy Law, LLC has been designated as the attorney for REACT, and further, because it possesses a high degree of professional experience and skill, such action may be taken without competitive bidding in accordance with Section 11.4 of the District's Purchasing Act.
Funds are available in Accounts 101-67000/68000/69000-612150.
Requested, John P. Murray, Director of Maintenance and Operations, PD:MFM
Recommended, Darlene A. LoCascio, Director of Procurement and Materials Management
Respectfully Submitted, Marcelino Garcia, Chairman, Committee on Procurement
Disposition of this agenda item will be documented in the official Regular Board Meeting Minutes of the Board of Commissioners for September 5, 2024