Campaign calls for the democratization of Chicago-based utility company
On May 7, 2020, during the RIde to Recovery event held in Downtown Chicago, someone holds a sign that says "People Over Profit." The event featured a 500 car and bike caravan, with other organizations like the Chicago Teachers Union, that aimed to pressure both Gov. J.B. Pritzker and Mayor Lori Lightfoot to support a program for real relief and recovery. (Photo/Sarah-Ji and Love + Struggle Photos).
The Chicago Democratic Socialists of America (CDSA) held a virtual event regarding their latest efforts which are calling for the municipalization and democratization of Commonwealth Eddison (ComEd).
Katie Meade, a member of CDSA who led the event, states that the campaign officially began in 2018 with various coalition members. The campaign was launched in response to ComEd’s 30-year contract with the city of Chicago expiring.
#DemocratizeComEd aims for the public control of the utility company and its handling of energy, or as Meade describes it: “public control of a public good that affects every resident of Chicago.”
ComEd has yet to respond to interview requests.
The campaign also aims to address racial justice within the city along with curbing climate change. Meade states that low-income communities often bear the brunt of climate change and the health effects of the energy industry.
According to a 2018 CNBC article, lower-income communities have higher rates of various health conditions, they’re more exposed to environmental hazards, and it’s harder for them to recover from natural disasters. Climate change will only worsen these already bad conditions.
The article references a federal report released that year which states that lower-income communities “typically have less access to information, resources, institutions, and other factors to prepare for and avoid the health risks of climate change.”
Low-income families also suffer from wealth extraction, which is when wealth is taken from low-income communities and moved to shareholders and investors instead. The extraction of wealth is usually done in a harmful way and it isn’t distributed evenly.
Wealth extraction can be described as an investment that relies on charging other people for access to an existing asset. For example, if someone buys a house and rents it out, they are extracting from an existing thing.
Matthew Cason, a member of the CDSA, explains that ComEd makes its money through utility rates. Every customer has to pay a delivery rate, meaning they have to pay in order for their power to be delivered and serviced to your home.
A reason for demand charges being so high may be due to “ratchet charges.” According to Electric Choice, ratchet charges are assessed by imposing a constant fee based on an annual peak-demand level from an earlier time. Ratchet charges can be charged to the customer for up to a year after it’s happened. Usually, customers are charged the monthly peak or 80 percent of the peak demand.
According to The Next System Project, the share of wealth by the richest 1 percent of households has increased from 33.8 percent in 1983 to 36.7 percent in 2013. One-tenth of the top 1 percent owned 22 percent of all US household wealth in 2012. What The Next System Project describes as the American elite owned as much as the bottom 90 percent of U.S. households combined.
Meade continues by stating how many people, especially from low-income communities, have to choose between groceries, medicine, paying their bills, or any necessities. She defines this as the energy burden; those who have to spend at least six percent of their income on their utility bills are considered to be energy burdened.
The campaign also wants to address racial justice.
Meade states, “Nationwide: African American households experienced this energy burden at 64 percent higher than white households.”
According to a 2020 study from the American Council for an Energy-Efficient Economy (ACEEE), about 67 percent of low-income households faced a high energy burden, while 60 percent had a severe energy burden.
CDSA has been involved with a stop powering police campaign. This campaign puts attention on the fact that ComEd and other private utility companies donated to police foundations. These with a higher energy burden tend to be over-policed; so, instead of reinvesting that wealth into the communities, companies like ComEd are investing in the police.
With #DemocratizeComEd, CDSA is trying to address climate change as the CEO of ComEd will only have 10 percent renewable energy by 2025, despite a nationwide standard of 25 percent by that time. They would also like to root out corruption within the company and the industry.
Andrew Barnett, another speaker at the event, states that ComEd is guaranteed an eight percent profit each year. Constellation, another energy company that owns many power plants, is owned by ComEd; in turn, ComEd is owned by Exelon, which happens to own five other utility companies in the United States.
Due to the monopolistic nature of the industry, ComEd is allowed that guaranteed profit every year. They are also in control of the distribution of energy throughout Chicago, despite there being many alternative energy companies in the city.
The municipal utility would essentially be the opposite of monopolization. Rather than the utility companies profit so much, the profit could go towards the communities. #DemocratizeComEd wants the creation of municipal utility to be democratic; in this sense, the people have a say over the company and hold it accountable.
“...if we had these revenues that were going back into the city, what could we spend $200 million on...for the city of Chicago for our communities, instead of…redistributing that wealth upward to investors,” asked Meade. She continues, “I would like us to more heavily invest in, you know, mass green transportation that was more readily available.”
Towards the end of the event, Barnett listed off the demands that the campaign essentially had. CDSA would want democratic control of the utility company along with a democratically elected oversight board. They’d want more transparency of company decisions; they’d want this so they could have public hearings or do Freedom of Information Acts (FOIA) requests.
In regards to ComEd's bribery case, Cason explains that the company had “orchestrated a multi-million scandal in support of Speaker Mike Madigan, in order to pass favorable legislation for themselves.”
Caseon continues, “They were able to influence the passage of legislation that made them hundreds of millions of dollars for the last decade.”