Proposal calls for ComEd to pay $38 million back to ratepayers for scandal tied to Michael Madigan indictment

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Commonwealth Edison electricity customers would get more than $38 million in refunds tied to the federal bribery scandal that led to former Illinois House Speaker Michael Madigan’s indictment, under a proposal being considered by state regulators.

While it would be about $17 million higher than the refund ComEd proposed in December, a utility watchdog estimated a typical residential customer would save “less than $5″ in the form of a credit on bills.

The new proposed order was filed this week by an administrative law judge at the Illinois Commerce Commission, which could consider the proposal by early September.

The proposal is designed to resolve two ICC investigations — one regulators initiated and one required by a new energy law approved last year. A key part of both probes was to examine whether ComEd improperly charged ratepayers costs tied to the scandal.

Abe Scarr, who heads Illinois PIRG, a public interest research group, said the small credit on customer bills pales in comparison to the billions in profits the company will net from laws it pushed for during the yearslong criminal enterprise.

“It’s still at the same very small level that’s totally out of proportion to the significant profits they … made from their scheming,” Scarr said.

The size of each customer refund would be based on their individual electricity usage. Refunds will also be made for commercial customers.

ComEd in July 2020 acknowledged in federal court that it sought to curry favor with Madigan by placing his political cronies into jobs requiring little or no work, hiring numerous college interns from the speaker’s 13th Ward political fiefdom, and installing the candidate he wanted on the company’s board of directors.

ComEd agreed with U.S. Attorney John Lausch to pay a $200 million fine and cooperate in the federal investigation in exchange for an agreement that prosecutors will drop a bribery charge against the utility.

Madigan, a Chicago Democrat, and Michael McClain, a Madigan confidant, former ComEd contract lobbyist and ex-lawmaker, were charged in March on a 22-count indictment alleging racketeering, extortion and bribery-related charges.

McClain also faces trial in September on corruption charges in a separate corruption case along with a former top ComEd official and two of the utility’s other contract lobbyists. Madigan, McClain and the other defendants have pleaded not guilty.

As part of the latest proposal, ComEd is voluntarily agreeing to cover costs for any employee that the company hired who was referred by Madigan and McClain, even those who held legitimate jobs and actually performed work, ComEd said.

“If approved by the ICC, the refund will resolve the question of whether customer funds were used in connection with the conduct detailed in the July 2020 deferred prosecution agreement,” ComEd said in a statement.

Though ComEd’s Springfield lobbying efforts have been a major focus of the scandal, the company said actual lobbying costs were not included in the refunds because those costs are not calculated into customer rates.

In December, ComEd proposed paying $21.1 million to match the costs linked mostly to pay and benefits received by former ComEd executives whose misconduct was outlined in the deal struck with Lausch. For example, the $1.8 million paid in 2011 to former ComEd CEO Anne Pramaggiore was among several of her annual paychecks calculated in the “non-lobbying costs” included in the refund proposal.

The proposed refunds in the December package included some non-lobbying costs for other operatives, including McClain, who remained active with the company after he retired from lobbying in 2016.

The higher refund now under consideration would include the costs of anyone that Madigan or McClain referred to ComEd “without regard for whether they did good work that served our customers well,” ComEd’s statement said.

The company said it has new policies in place to stop any similar misconduct from happening.

ComEd declined to provide names of employees “who were not accused of wrongdoing, who performed their jobs well and do work that provides value to our customers,” the company said.

The roughly $38 million overall refund is broken down in two parts.

Approximately $31 million is tied to ComEd’s distribution rates and would appear as a credit of about $4.77 on average for residential customers in April 2023. The timing when the rest of the refund would be received depends on a review by federal regulators.

Carrie Zalewski, the ICC chair, has recused herself from the case. Her father-in-law is former Ald. Mike Zalewski, 23rd, who held a subcontract with the lobbying firm of Jay Doherty, who has pleaded not guilty to corruption charges in the federal case. The former alderman’s home was raided by federal agents in 2019. He has not been charged. He is the father of Rep. Mike Zalewski, a Riverside Democrat running for reelection and married to Carrie Zalewski.

rlong@chicagotribune.com